This article is from the public number:Economic Observer Observer (ID: eeoobserver), author: Xu Jin, from the title figure: Oriental IC
The United States is still under the framework of reciprocity, and unless there is a big shock, this framework will not change.
There is a saying that everything about the United States is business (American’s business is business). In all businesses, trade can be said to be the business of the country. In fact, the story about trade began at the beginning of the founding of the United States. Trade plays a very important role in American domestic politics and international diplomacy.
Combing the history of American trade, not only can clarify the past, but also understand the current and future problems. American economic historian Douglas Owen (Douglas·A·Irwin) has long been concerned about the US economy and can be said to be a leader in the field of trade history. He is a professor at Dartmouth College in the United States, a researcher at the National Bureau of Economic Research (NBER), and has long been an Economist, The Wall Street Journal. International media such as The New York Times and The Financial Times write articles, and narratives often have logic and stories.
“Trade Conflict: US Trade Policy 200 Years” is his new book, with more than 800 pages, which is a “brick masterpiece” that cannot be missed in the US trade policy field. What is rare is that his narrative does not appear boring, and reading is not boring. The Nobel laureate in economics, Sargent, came to China and was especially recommended when he was asked about the trade war.
The history of American trade has been two hundred years. It seems that behind many complicated events, there is actually a main line of trade. Owen believes that the US trade policy has three goals. Because the English letters of these three objectives are all beginning with the letter R, he summarizes the goal of “3R”. What are the three specific goals? First, it’s tax, which protects domestic manufacturers from foreign competition by restricting imports; the third is Reciprocal
It can be said that these three goals basically determine the degree of US trade policy, and the friction between them constitutes a trade policy change. These three goals have different focuses in different periods. Therefore, the US trade policy can therefore be divided into three eras: From the War of Independence to the Civil War, the US trade policy fights for taxation; from the Civil War to the Great Depression, US trade policy struggles for restrictions, or To say protectionism, from the Great Depression to the present, the American trade war turned to support reciprocity.
The US trade policy feels great, but the long-term pattern is relatively stable. First of all, from the perspective of economic factors, the changes in the appeals of major interest groups are relatively slow. For example, exporters often want to lower tariffs, and manufacturers often want to increase tariffs. Goods may vary, but the logic is probably similar. Economic activities in different regions, involving manufacturers and workers in different industries, cannot be changed in decades, even for centuries. For example, cotton is always produced in Mississippi, tobacco is in Kentucky and North Carolina, and steel is in Pennsylvania. Due to commercial factors, each state’s interest groups and members of Congress are striving for their own interests. Under the multiple games, the legislation that makes great changes to the status quo is difficult to pass, making the policy stable.
This appeal is projected into the political realm and reflects the differences in the ideas of partisan politics. Most of the early supporters of the Democratic Party came from the South, and the farmers needed to export, so the Democratic Party advocated low import tariffs, while the Whigs and later Republican supporters came from the northern industrial areas, so they often advocated protective high tariffs. In the era of the founding father James Madison, the pattern was probably doomed.
Madison recognizes the different interest groups behind trade policy, “how much should the restrictions on foreign manufacturers be used to encourage domestic manufacturers? The landowner class and the manufacturer class have very different conclusions about these issues. And may not be for consideration of justice and the public interest.”
Party interest patterns are delineated in this regard. The Republican Party relatively supports protectionism, while the Democratic Party is relatively less protective. Unable to change the partisan politics, such as the Great Civil War or the Great Depression, can change the US trade policy. Under normal circumstances, US trade policy is very stable even if it faces a fierce game of various political and economic factors.
Political factors, partisan politics and republicanism have led to the stability of US trade policy in the miracing. Owen pointed outOn the one hand, the pain caused by the conflicts in US trade policy runs through the political conflicts in the United States; on the other hand, the characteristics of the US economic geography and political system maintain the stability of US trade policy.
Under this clear and concise framework, in fact, many details reflect the author’s skill, and there are also many insightful discoveries. For example, the “Hawley-Smoot Tariff Act” introduced in 1930 has raised the tariffs on more than 2,000 imported goods to the highest level in history. Many people have criticized this for the Great Depression, because after the bill, US imports and exports have been greatly reduced. A small number of scholars believe that the protection of this bill is helpful to the US economy. Owen’s research believes that this program has little to do with the Great Depression. Regarding the role of interest in tariffs, he pointed out that national trade unions often have no clear attitude towards tariffs, and the influence of different industry associations is even greater.
Business is business, but trade is more than just business. In most cases, interest and political games may determine policy trends, but sometimes, purely idea-based persistence can make a big difference.
For example, Hull, who served as US Secretary of State from 1933 to 1944. We know that the lessons of the two world wars are related to trade and involve competition for raw materials. However, Hull’s personal philosophy is that the primary goal after the war is to “create the final conditions for a just peace”, which means that all countries can obtain raw materials without distinction and should not express nationalism through trade restrictions. This belief has been accompanied by the leadership of the United States after World War II, which not only promoted the direction of US trade policy, but also changed the world trade order.
At the time, such a view was obviously too idealistic. Even economists like Keynes believe that economic planning such as import quotas and state-run trade is needed after the war to ensure full employment. He called the draft agreement on disarming attitudes in the United States “Mr. Hull’s crazy advice”, and he also had a conflict of ideas with Assistant Secretary of State Acheson. It is not surprising that Keynes thinks this way. He believes that many aspects of laissez-faire in international trade are correct, but his ideas are often based on practical perspectives, and he hopes to solve the economy through planning, especially to defend Britain’s long-term preferential rights in international trade.
In the end, Hull’s efforts were successful, not just the role of interest. It seems that he comes from the South, which traditionally supports free trade, but his result is precisely that it is not a simple political paralysis. His efforts are more driven by his own ideas than by interest groups.
It is worth noting that when we talk about trade today, we always talk about economic arguments such as free trade that contribute to consumer welfare. It seems that the feasibility of the economy is self-defeating the feasibility of politics. Very good ideaGood, but it may not be the case. From the perspective of American history, trade seems to be an economic issue, but in a country where lawyers like the United States are the masters, it is actually more political. In the past, Congress has long dominated the trend of trade policy, but since 1934, the situation has changed. In 1934, the Reciprocal Trade Agreement Act was passed, which allowed the president to reach a trade agreement with a foreign country. This means that the president’s role in trade is magnified and the president can lead Congress.
As a result, the introduction of trade policies is often the result of the exchange of political ideas with partisan politics and even interests. Free trade is often good for consumers, but consumers are often dispersed, so there is no way to form a concerted interest group. Before the Sino-US trade war, chatting with an economist who studies trade, I said that since free trade is an economic consensus, why are there so many oppositions? He said that free trade has never been a consensus, even in the field of research. Even if economists like Douglas Owen have to look at history, they have to say that economists have no big influence on trade policy.
The most typical example is the 1930s. Even if more than 1028 economists joined the book, it would be useless to ask President Hoover not to sign the trade protectionist bill, the Holly-Smoot Tariff Act. This is somewhat conceivable. Whether hundreds of economists have joined the book against the election of Trump, or thousands of economists have issued open letters against trade protection, although there are many concerns, it does not help to change the actual policy. Of course, although economics is not valued by policy, it is not useless. As economics tells us, trade can always bring economic benefits, and tariffs are actually indirectly taxing consumers. On the most realistic path, economists influence the public’s perceptions and indirectly influence policies by explaining the benefits of trade and the cost of protection.
According to the author’s logic, the United States is still under the framework of reciprocity, and unless there is a big shock, the framework will not change. This answer is enough to make us feel reassured about the current trade disputes, but we need to pay attention to the changes under the premise. For example, we talk about reciprocal This article is from the public number:Economic Observer Observer (ID: eeoobserver) , author: Xu Jin