What we are reading
Trade trends to follow in 2024
Published 16 January 2024
We’ve entered the biggest election year in history. How will this impact trade flows in 2024 and beyond? Will China’s new economic plans exacerbate trade tensions? What does US-China decoupling look like in reality? Plus, other pieces on the resurgence of industrial policies, dollar dominance, and more from our latest reading list.
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Top global risks for the year | More US-China trade tensions to come | Modern industrial policy | New trade resources to start your year | More research from Hinrich Foundation
Top global risks for the year
Eurasia Group presents its Top Risks 2024, with ongoing wars in Ukraine and the Middle East, China’s poor economic recovery, and competition over critical minerals resources expected to have a significant impact on trade. Bloomberg notes that politics in 2024 is the wild card for trade and describes how Houthi Red Sea attacks could impact trade flows.
Mentioned publications
- Top Risks 2024 – Eurasia Group, January 8, 2024
Ongoing conflicts, China’s lack of economic recovery, and the fight over critical minerals top the list of trade risks. -
Politics Is a Wild Card in Trade’s Resurgence: Bloomberg Tracker – Claire Jiao, Michelle Jamrisko, Chloe Whiteaker and Cedric Sam, Bloomberg, January 10, 2024
Trade recovered towards the end of 2023 but political risks could shape 2024 outcomes. -
How Houthi Red Sea Attacks Are Disrupting World Trade – Bloomberg, January 6, 2024
Will Houthi attacks on ships transiting the Red Sea cause significant problems for global trade?
More US-China trade tensions to come
In the New York Times, Keith Bradsher says China’s new economic plans emphasizing advanced manufacturing to drive economic growth will increase trade tensions in the future. The Wall Street Journal examines how China’s EV, steel, and renewable energy manufacturing is already causing concern with trading partners. Newly-issued Biden Administration rules limit subsidies for EVs with Chinese-made parts, per Politico. Noah Smith describes what US-China decoupling looks like in reality, in Noahpinion.
Mentioned publications
- More Semiconductors, Less Housing: China’s New Economic Plan – Keith Bradsher, The New York Times, November 6, 2023
Will China’s renewed investment in advanced manufacturing create even greater trade tensions? -
China Is Making Too Much Stuff—and Other Countries Are Worried – Stella Yifan Xie and Tom Fairless, The Wall Street Journal, November 10, 2023
Watch out for increased US-China trade tensions over EVs, steel, and renewable energy goods. - Biden’s latest China crackdown puts his EV ambitions at risk – James Bikales, Politico, December 1, 2023
The Biden Administration introduces new rules designed to limit subsidies for Chinese EV imports. - Stop saying "there is no decoupling". There is! – Noah Smith, Noahpinion, December 4, 2023
Even if decoupling is not obvious it is still occurring.
Modern industrial policy
Nippon Steel’s acquisition of US Steel tests Biden’s industrial policy efforts to protect the steel industry, according to the New York Times. How do WTO rules apply to modern industrial policies designed to address climate change and other challenges? Chad Bown raises more questions than answers in a new paper for the Peterson Institute for International Economics. Global Trade Alert presents a new database of modern industrial policy measures adopted since 2023.
Mentioned publications
- Japanese Company’s Bid for U.S. Steel Tests Biden’s Industrial Policy – Jim Tankersley, The New York Times, January 7, 2024
Will the Biden Administration use CFIUS to block Nippon Steel’s acquisition of US Steel? - Modern industrial policy and the WTO – Chad P. Bown, Peterson Institute for International Economics, December 2023
A report raising questions about the use of modern forms of industrial policy and WTO rules. -
New Industrial Policy Observatory – Global Trade Alert, January 4, 2024
A database of “new industrial policy” measures undertaken since January 2023.
New trade resources to start your year
McKinsey Global Institute provides the Global Trade Explorer, a visualization of trade flows and interdependencies. The Atlantic Council maintains the Dollar Dominance Monitor, measuring the continued dominance of the US Dollar and attempts by economies to diversify away from it. The WTO gives us Trade Policy Tools for Climate Action. Porges Trade Law publishes a database of regional trade agreement dispute settlement documents and analysis.
Mentioned publications
- Global Trade Explorer – McKinsey Global Institute, October 28, 2023
A new tool to visualize global trade flows and trade interdependencies - Dollar Dominance Monitor – The Atlantic Council, December 2023
A resource tracking the dollar’s status as the world’s dominant currency and the progress of other currencies in competing with the dollar. - Trade Policy Tools for Climate Action – World Trade Organization, December 2, 2023
What trade policy tools can help to combat climate change and reduce carbon emissions? - Regional trade agreement dispute settlement – Porges Trade Law PLLC, January 2024
A resource compiling instances of regional trade agreement dispute settlement proceedings, along with links to all relevant, publicly available documents.
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