Ricardo Hausmann
The founder and director of Harvard University’s Growth Lab, and Eric Protzer, a senior research fellow at Harvard University’s Growth Lab.U.S. President Donald Trump holds up a chart showing foreign tariff rates, later shown to be false, and new U.S. rates during an event in the Rose Garden at the White House in Washington on April 2.U.S. President Donald Trump holds up a chart showing foreign tariff rates, later shown to be false, and new U.S. rates during an event in the Rose Garden at the White House in Washington on April 2.
Financial markets and U.S. businesses relying on imports have forced U.S. President Donald Trump to significantly climb down from his recent tariff broadside against most of the world but especially Western allies and China. However, he could have extracted more concessions from Beijing if he had pursued a strategy of all against one, rather than one against all.
The United States may account for more than half of global stock market capitalization and roughly a quarter of world GDP, but it only produces 9 percent of global good exports and takes in 14 percent of global goods imports. No single country—not even the United States—is a unipolar superpower when it comes to trade in goods, which is where Trump wants to fight his war. A coalition of countries could have more seriously challenged China, but collective action now looks impossible, given the extent to which Trump has alienated Washington’s traditional allies.
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