Trade protectionism curtails U.S. economic development, says economist
U.S. actions in the trade sphere not only curtail America’s economic development, but also undermine its alliances, thereby diminish its own global power, said renowned U.S. economist Anne O. Krueger in an article recently published on Project Syndicate.
Though former U.S. President Donald Trump’s protectionist strategy clearly failed, the Biden administration is nonetheless perpetuating it by leaving the previous administration’s tariffs in place and adopting “buy American” policies of its own, said Krueger in her article released on Thursday.
“By acting unilaterally, Trump weakened the open multilateral system and harmed the U.S. economy, along with those of its allies,” said the former World Bank chief economist and former deputy managing director of the International Monetary Fund.
“Protectionism and subsidies also encourage domestic monopolistic behavior, leading to lower productivity growth and even more lobbying to maintain undue privileges,” she said, adding “these practices discourage new players from entering markets and make it much more difficult for small firms to expand.”
Krueger believes that removing protectionist measures and strengthening the open multilateral system would yield vastly superior results.
She called on the United States to “re-engage as a constructive leader within the World Trade Organization and seek agreements on reforms to cover new issues like e-commerce and climate change.”