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Changing influences in US global economic policy

Published 16 May 2023

Is national security playing a larger role in US economic relations? How will resource nationalism affect the production of critical minerals? How are EVs affecting automotive trade? Explore our reading list for the latest developments in international trade.

Role of national security in economic relations

Are recent statements by US officials indicative of a new era in US economic policymaking with national security playing a larger role in international economics? At the end of April, National Security Advisor Jake Sullivan made a major speech on renewing economic American leadership. Ed Gresser of the Progressive Policy Institute has some worried reactions, while Jean Pisani-Ferry, writing in Project Syndicate, comments on the heavy influence of national security policy in international economic relations.

Mentioned publications

  1. Remarks by National Security Advisor Jake Sullivan on Renewing American Economic Leadership at the Brookings InstitutionThe White House, April 27, 2023
    The Biden administration aims to more deeply entwine domestic and foreign policy.

  2. The National Security Advisor’s Disquieting Global-Economy Speech: Some Worried Reactions by a Friend – Ed Gresser, Progressive Policy Institute, May 2023
    Did Sullivan’s speech mischaracterize trade history and focus on the wrong targets?

  3. The Economic Threat of Undisciplined Geopolitical Primacy – Jean Pisani-Ferry, Project Syndicate, May 1, 2023
    National security and international economics experts must find a balanced way forward.

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Resource nationalism and critical minerals

Minerals critical to the clean energy transition are heavily concentrated in a few key economies. How will the domestic policies of these economies affect the supply chains for these minerals? Indonesia’s nickel resources are a key focus – the Wire China declares it a ‘nickel pickle’, while Joseph Rachman reports that China has sewn up this market, and Cullen Hendrix advocates for Indonesia to do away with its nickel export bans. Meanwhile, the EU faces challenges in developing indigenous rare earths supply chains, and Latin America is nationalizing its critical minerals resources, per the Economist.

Mentioned publications

  1. The Nickel Pickle – Eliot Chen, The Wire China, May 7, 2023
    Can Indonesia take advantage of massive Chinese investment while enjoying access to US incentives?

  2. China Has Sewn Up a Critical Metals Market – Joseph Rachman, Foreign Policy, April 17, 2023
    Nickel is a critical mineral for EV production, and China has a dominant share of it in Indonesia.

  3. Indonesia wants to sell nickel to the US, but first it should scrap its export bans – Cullen S. Hendrix, Peterson Institute for International Economics, April 26, 2023
    Should Indonesia limit its use of export bans in order to benefit from US IRA incentives?

  4. Rare Earth Reshore – Luke Patey, The Wire China, April 23, 2023
    Can Europe successfully establish a rare earths supply chain within the EU?

  5. The green revolution will stall without Latin America’s lithiumThe Economist, May 2, 2023
    How will resource nationalism affect production of critical minerals?

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Food security remains a challenge in 2023

What policy responses can ameliorate food insecurity? The Food and Agriculture Organization of the United Nations, World Bank Group, and World Trade Organization provide an assessment, while Ertharin Cousin, Devry Boughner Vorwerk, and Matthias Berninger, writing in Foreign Policy, tell us how to prevent a meltdown of the global food system.

Mentioned publications

  1. Rising Global Food Insecurity: Assessing Policy ResponsesFood and Agriculture Organization of the United Nations, World Bank Group, World Trade Organization, April 2023
    Governments must do more to improve functioning and resilience of global food markets.

  2. How to Prevent a Meltdown of the Global Food System – Ertharin Cousin, Devry Boughner Vorwerk, and Matthias Berninger, Foreign Policy, April 18, 2023
    2022 was bad but could have been worse; the world is still in danger of a meltdown in 2023.

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Trade and technology potpourri

Semiconductors and electric vehicles are a key focus of trade competition. South Korea and the United States are advancing policies to develop their semiconductor industries. Arrian Ebrahimi and Joon Kang compare their approaches in Chip Capitols. China is on track to surpass Japan in vehicle exports, and disputes over EVs are coming soon to Europe, driven by China’s increasing dominance in the sector. The OECD estimates the impact of digital trade.

Mentioned publications

  1. Chip Funds for Underdogs or Chaebols – Comparing Korea and the US – Arrian Ebrahimi and Joon Kang, Chip Capitols, May 10, 2023
    A deep dive into South Korea’s domestic chip policymaking.

  2. China On Track To Pass Japan in Auto Exports – Richard Katz, Japan Economy Watch, April 25, 2023
    Is China doing to Japan’s automakers what Japan did to Detroit’s big three?

  3. The coming disputes over trade in electric vehicles – Alan Beattie, Financial Times, April 24, 2023
    Competition and conflict over EV trade is coming soon to Europe.

  4. Of Bytes and Trade: Quantifying the Impact of Digitalisation on Trade – Javier López González, Silvia Sorescu, and Pinar Kaynak, OECD, May 3, 2023
    Digital trade has increased over the past 20 years as digitalization becomes increasingly important.

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Russia prefers the yuan to the rupee

Although trade between India and Russia is increasing, Russia prefers to be paid in yuan, reports Quartz.

Mentioned publications

  1. Russia wants to settle its trade in yuan—and India is running out of optionsQuartz, May 11, 2023
    Russia remains reluctant to adopt rupee denominated trade, despite increased trade flows with India.

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All that for a can of Coke…

Lastly, are Chinese programs to attract talent also incentivizing IP theft and fraud? A fascinating investigation from Bloomberg provides a tale of trade secrets theft in the context of China’s Thousand Talents Program.

Mentioned publications

  1. The Plot to Steal the Other Secret Inside a Can of Coca-Cola – Drake Bennett and Jordan Robertson, Bloomberg, May 11, 2023
    A case of trade secrets theft provides insights into China’s talent acquisition and subsidies programs.

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