The Breakdown A Better(?) Approach to Fixing the Broken Global Trading System
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Apr 27, 2025 Delve into the intricacies of the broken global trading system and the lasting impact of Trump's tariffs. Discover historical insights from economists like Keynes and Robinson, revealing how trade surpluses can hinder growth and demand. Explore the complex relationship between domestic policies and international trade dynamics. The discussion emphasizes the urgent need for a new global trade agreement and balanced economies to foster cooperation and prevent future tensions.
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Wage Suppression Harms Global Economy
- The global trading system suffers from countries competing by suppressing wage growth to boost manufacturing exports.
- This competition reduces global demand, harming all economies involved in the cycle.
Trade Surpluses Externalize Costs
- Countries running persistent trade surpluses shift domestic consumption costs to their trade partners.
- Such beggar-thy-neighbor policies reduce global demand and fuel global trade tensions.
Asymmetric Globalization Creates Tensions
- Some countries prioritize global integration over domestic control while others keep tight controls, imposing imbalances on trade partners.
- This asymmetric globalization breeds economic tension and trade conflicts.