The Economics Show Making sense of Trump's tariffs. With Dani Rodrik
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Feb 6, 2025 In this discussion, Dani Rodrik, a Harvard professor and renowned expert on industrial policy, delves into the complexities of tariffs and their historical significance in global trade. He questions the rationale behind Trump's tariff policies, suggesting they may be superficial solutions. The conversation highlights the resurgence of industrial policy and the need for state intervention, especially in renewable energy. Rodrik urges a shift towards domestic innovation over international competition, reflecting on the broader political implications tied to economic policies.
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Early Globalization Critique
- Dani Rodrik's book, "Has Globalization Gone Too Far?", anticipated the backlash against globalization in the late 1990s.
- His work challenged the then-dominant "Washington Consensus" and explored the social and political consequences of economic liberalization.
Publisher Hesitation
- Rodrik's publisher hesitated due to concerns from board members about the book's critical stance on globalization.
- Even some economists worried that his work would give "ammunition to the barbarians."
Trump's Senseless Tariffs
- Trump's tariffs, while seemingly aligned with Rodrik's earlier critiques of globalization, are deemed "senseless."
- They lack a coherent policy rationale, unlike strategic tariffs used in industrial policy.