Among many other changes, the US election has removed globalisation’s critic-in-chief. Shocking economists and world leaders alike at the 2018 United Nations General Assembly, President Trump said America would “always choose independence and cooperation over global governance, control and domination”.
Joe Biden has a different view, saying in an October town hall, “America First has made America Alone”. But despite his stated desire to re-engage with the intergovernmental organisations Trump repudiated, the rise of many protectionist policies is here to stay – and the COVID-19 pandemic has accelerated the trend further. The globe was witnessing “greater protectionism and less trade liberalisation worldwide”, according to a report from Global Trade Alert at the end of last year.
Between January 2017 (the beginning of the Trump presidency) and November 2019, 2,723 policies (tariffs or subsidies) were introduced to create “trade distortions”, the report found. This distorted more than $10bn in trade, it calculated, and involved policy changes in 15 countries (counting the EU as a single jurisdiction), not just the US and China.
Another way of looking at the impact of protectionism is through world trade figures. According to the World Trade Organisation (WTO), the value of world merchandise trade was down 3% last year, and growth in trading services slowed dramatically from 8.6% in 2018 to 2.1% in 2019. This comes directly after the opening salvoes of the US-China trade war and before the effects of the COVID-19 pandemic become fully clear.
Rancour between the US and China and hostility