The Economics Show
Martin Wolf talks to Richard Baldwin: What’s the future of global trade?
Feb 24, 2025
In this engaging discussion, Richard Baldwin, a Professor of International Economics at IMD Business School and founder of VoxEU, shares insights with Martin Wolf, chief economics commentator at the Financial Times. They dive into the ineffectiveness of Trump's tariffs in today’s global trade context. Baldwin emphasizes the rise of digital services and invisible trade, challenging the notion of globalization's decline. They also unpack the implications of automation and AI, rethinking labor dynamics and the shift from manufacturing to service-oriented economies.
36:19
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Quick takeaways
- Donald Trump's tariffs exemplify a misguided approach to modern trade dynamics, failing to account for the complexities of global supply chains.
- The rapid growth of digital services is reshaping globalization, highlighting a transition from traditional manufacturing to skilled service professions in the economy.
Deep dives
The Evolution of Globalization
Globalization has experienced significant changes over the past few decades, characterized by different phases shaped by technological advancements and economic strategies. The concept of a 'false peak' post-2008 suggests that while globalization seemingly slowed, it merely transitioned due to China's evolving role in the global economy and a shift away from traditional trade patterns. The first phase involved the rapid increase of two-way trade with a focus on manufacturing, particularly influenced by offshoring and the emergence of global supply chains. As manufacturing has settled into a plateau, marked by China's slower growth in export ratios, the nature of globalization is on the cusp of further transformation.
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