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What will 2023 hold for trade?


Published 10 January 2023

What will be the impact of the new approach in US trade policy on the WTO and international trade? Can a green steel club reduce emissions? We cover the risks and trends shaping trade flows and trade policy in 2023 in our latest reading list.

Risks and trends shaping trade policy

2022 was an eventful year for global trade. What’s to come in 2023? Top risks include a rogue Russia, Xi Jinping’s unfettered ability to pursue his nationalist policy agenda, and inflation shocks, according to the Eurasia Group. Experts provide six interesting trade predictions in Politico, while Bloomberg offers five ways in which fragility in global trade will be revealed in 2023. Ten trade trends were identified for the coming year by the Trade Data Monitor.

Mentioned Publications

  1. Top Risks 2023 – Eurasia Group, 3 January 2023
    A rogue Russia, Xi Jinping’s maximized power, disruptive new technologies, and inflation are key risks to watch.
  2. 6 big trade predictions for 2023 – Steven Overly, Politico, 3 January 2023
    Experts provide six interesting predictions for trade in 2023
  3. Fresh Fragility in Global Trade Set to Be Revealed in 2023 – Bryce Baschuk, Bloomberg, 3 January 2023
    Five ways that global trade will transform in 2023.
  4. Trade Data Monitor’s Top 10 Trade Trends Going Into 2023 – John W. Miller, Trade Data Monitor, 3 January 2023
    Covid-related trade bumps are over, the US will export more, and other trends for 2023.

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Impact of the new US trade policy on WTO  

Mark Linscott, writing for the Atlantic Council, identifies the triple threat facing the World Trade Organization (WTO). Alan Beattie sums up the WTO judgment that no one wanted for the Financial Times, as Bloomberg reports on the WTO’s second decision against the US’s use of the essential security exception. Paul Krugman explains why America is getting tough on trade. Adam Tooze ponders Washington’s disruptive new consensus in Chartbook. Meanwhile, the US Treasury issued a white paper that gives hope to European and Korean car makers who want to qualify for electric vehicle tax credits, as reported in Politico.

Mentioned Publications

  1. A triple threat is putting the multilateral trading system at risk. What can the WTO do about it? – Mark Linscott, The Atlantic Council, 30 November 2022
    Industrial policies and protectionist measures are undermining the multilateral trading system.
  2. WTO judgment no one wanted to happen – Alan Beattie, Financial Times, 12 December 2022
    Forcing the WTO to make a judgement on “national security” puts it between a rock and a hard place.
  3. WTO Backs Hong Kong in Trump-Era ‘Made in China’ Dispute With US – Bryce Baschuk, Bloomberg, 12 December 2022
    WTO rules against the US’s use of the essential security exception for a second time.
  4. Why America Is Getting Tough on Trade – Paul Krugman Op-Ed, The New York Times, 12 December 2022
    The Biden administration is shifting the basic foundations of the world economic order.
  5. Chartbook #182 Washington's disruptive new consensus – Adam Tooze, Chartbook, 24 December 2022
    Is the EU overreacting to EV incentives in the Inflation Reduction Act?
  6. Anticipated Direction of Forthcoming Proposed Guidance on Critical Mineral and Battery Component Value Calculations for the New Clean Vehicle Credit – U.S. Treasury White Paper
    A new Treasury white paper indicates that the agency will be flexible in defining “free trade agreements”.
  7. Biden admin bows slightly to European pressure in trade clash – Doug Palmer, Politico, 29 December 2022
    The US Treasury may have found a loophole to allow EV tax credits to apply to key trading partners.

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The US pivot on trade and technology

The latest phase in the chip war kicked off with a significant speech from US National Security Advisor followed by new export controls, writes Jordan Schneider in Noema. The US finished the year by imposing additional controls on more than 30 Chinese companies. China’s chip industry fights to survive, per Nikkei Asia, as the Chinese government pursues a WTO dispute. Danzman and Kilcrease warn the US of the illusion of controls in Foreign Affairs. Europe is working to catch up, according to the Financial Times.  What’s next for the chip industry? Zeyi Yang gives insights in the MIT Technology Review.

Mentioned Publications

  1. Remarks by National Security Advisor Jake Sullivan at the Special Competitive Studies Project Global Emerging Technologies Summit – The White House, 16 September 2022
    The US National Security Advisor calls for emerging technologies to work for, not against, democracy.
  2. A Bombshell For U.S.-China Tech Relations – Jordan Schneider, Noema Magazine, 27 October 2022
    2022’s export controls confirm a major shift in US-China trade and technology relations.
  3. US targets China’s potential chip stars with new restrictions – Qianer Liu and Kathrin Hille, Financial Times, 14 December 2022
    The US imposes new restrictions on a major chip maker and 30 other companies.
  4. China's chip industry fights to survive U.S. tech crackdown – Cheng Ting-Fang and Shunsuke Tabeta, Nikkei Asia, 30 November 2022
    US export controls are changing China’s industrial supply chains for semiconductors.
  5. United States – Measures on Certain Semiconductor and Other Products – The World Trade Organization, 15 December 2022
    China requests WTO consultations on US export controls.
  6. The Illusion of Controls – Sarah Bauerle Danzman and Emily Kilcrease, Foreign Affairs, 30 December 2022
    The US position in semiconductor supply chains is not so dominant that it can act alone.
  7. The global microchip race: Europe’s bid to catch up – Lauly Li, Financial Times, 13 December 2022
    Europe is struggling to catch up in certain areas of chip production.
  8. What’s Next for the Chip Industry? – Zeyi Yang, MIT Technology Review, 3 January 2023
    Experts offer their predictions for the coming year in the geopolitical struggle over semiconductors.

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Green steel coalition

The US has proposed the formation of an international consortium to promote trade in metals produced with fewer carbon emissions. The Roosevelt Institution, an influential US think tank for progressive trade ideas, proposed this in a 2021 paper.

Mentioned Publications

  1. US Proposes Green Steel Club That Would Levy Tariffs On Outliers – Ana Swanson, The New York Times, 7 December 2022
    The US has proposed the creation of an international consortium to promote trade in metals produced with fewer carbon emissions.
  2. A Green Steel Deal: Toward Pro-Jobs, Pro-Climate Transatlantic Cooperation on Carbon Border Measures – Todd N. Tucker and Timothy Meyer, Roosevelt Institute, 3 June 2021
    A paper that inspired the green steel coalition proposal.

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