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Begin New Search Topic International Trade and Finance Political Geography North America

1. Power and Financial Interdependence

Author:
Brad Setser
Publication Date:
05-2024
Content Type:
Working Paper
Institution:
Institut français des relations internationales (IFRI)
Abstract:
The link between financial self-reliance and geopolitical power has long been debated. The unbalanced Sino-American trade relationship has created asymmetric financial ties which generate potential sources of leverage for both parties and will not quickly disappear. Absent a clarifying major crisis, it will be difficult to definitively determine which party has greater leverage. Many in the United States (US) are concerned about indebtedness to its primary strategic rival, and the risks posed by a sudden Chinese withdrawal from US financial markets. US policymakers actively sought to encourage China’s top leadership not to withdraw financing from the market for US Agency securities in the run-up to the global financial crisis. Yet China also sees risks in this unbalanced financial relationship. Chinese policymakers have expressed concern about the domestic political consequences of losses on either their Treasury or Agency holdings and actively have sought to diversify China’s reserves – including by substituting the risk of lending to developing economies for the visibility associated with large holdings of Treasuries in US custodians. China increasingly worries that its dollar holdings and the dollar’s global role increase its vulnerability to potential financial sanctions. Both parties thus worry about the possibility that financial interdependence can be weaponized yet find it hard to extricate themselves from the inevitability of financial interdependence absent a clean break from an entrenched pattern of trade imbalances.
Topic:
International Trade and Finance, Bilateral Relations, Finance, and Interdependence
Political Geography:
China, Asia, North America, and United States of America

2. Crafting a Robust U.S. Carbon Border Adjustment Mechanism

Author:
Sanam Rasool, William Alan Reinsch, and Thibault Denamiel
Publication Date:
08-2024
Content Type:
Policy Brief
Institution:
Center for Strategic and International Studies (CSIS)
Abstract:
The introduction of a carbon border adjustment mechanism (CBAM) in the United States presents an intricate policy challenge at the intersection of climate action and international trade. With countries around the world integrating climate considerations into their trade policies, the United States is under growing pressure to develop and implement its own CBAM. This policy tool, already adopted by the European Union, is geared toward leveling the playing field for domestic industries while promoting global climate action and accountability. A future U.S. CBAM could serve as a vital instrument in the nation’s transition toward a net-zero economy, encouraging domestic carbon footprint reduction and driving trading partners to adopt cleaner practices. However, crafting and rolling out such a mechanism comes with knotty challenges, ranging from choosing optimal carbon accounting methods and pricing to warding off potential trade disputes and garnering global collaboration. As the United States charts its course through this complex policy landscape, it has the opportunity to shape global climate action while safeguarding its economic interests.
Topic:
Climate Change, International Trade and Finance, Economy, and Carbon Border Adjustment Mechanism (CBAM)
Political Geography:
North America, Global Focus, and United States of America

3. Formula for a Crisis: Protectionism and Supply Chain Resiliency—the Infant Formula Case Study

Author:
Scott Lincicome, Gabriella Beaumont-Smith, and Alfredo Carrillo Obregon
Publication Date:
01-2023
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
It has become accepted wisdom in Washington that the COVID-19 pandemic revealed how openness to international trade and investment increases U.S. vulnerability to economic shocks and contributes to widespread shortages of food, medicine, and other essential goods. This official narrative, however, ignores ample economic research showing that, while disruptions are inevitable in a modern economy, the alternative to free trade—a protectionism‐​driven onshoring of global supply chains—carries its own risks and can even heighten vulnerability by inhibiting natural market adjustments to economic shocks. The infant formula crisis, which lasted for most of 2022 and was unique to the United States, provided an unfortunate real‐​world lesson in this regard.
Topic:
International Trade and Finance, Free Trade, Resilience, COVID-19, and Supply Chains
Political Geography:
North America and United States of America

4. Industrial policy for electric vehicle supply chains and the US-EU fight over the Inflation Reduction Act

Author:
Chad P. Bown
Publication Date:
05-2023
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
The Inflation Reduction Act (IRA) of 2022 provoked a transatlantic trade spat. After the law was passed, the Biden administration addressed some of the concerns raised by the European Union by writing controversial rules to implement the legislation. These regulations are expected to have complex effects that, in some instances, may offset the intended impact of other provisions in the original legislation. This paper examines how the law, its implementing regulations, policy decisions on leasing, as well as potential critical minerals agreements all have the potential to affect the electric vehicle (EV) supply chain. The EV case study showcases the political-economic complications involved in US and EU attempts to cooperate over clean energy transition policy to address the global externality of carbon dioxide emissions. EVs are but one example of the challenge facing partners with integrated supply chains and similar levels of economic development that share concerns about climate change, rising inequality, workers, other social issues, and democracy itself. The EV conflict laid bare the differing US and EU prioritization of these issues relative to economic efficiency, World Trade Organization rules, the approach to nonmarket economies, and national security vulnerabilities that arise from depending on an authoritarian regime such as China for import sourcing of critical inputs.
Topic:
Industrial Policy, International Trade and Finance, European Union, Supply Chains, and Electric Vehicles
Political Geography:
Europe, North America, and United States of America

5. Impact of economic sanctions on net commodity-producing and net commodity-consuming countries

Author:
Sergio R. Vale and Eduardo Viola
Publication Date:
01-2023
Content Type:
Journal Article
Journal:
Revista Brasileira de Política Internacional (RBPI)
Institution:
Instituto Brasileiro de Relações Internacionais (IBRI)
Abstract:
The war in Ukraine has had a marked economic impact. However, since Russia is a net producer of important commodities, the impact of sanctions on its economy was less than expected. But what would happen if there was a war involving a country that was a net importer of commodities? In the case of a possible China-US conflict over Taiwan, the impact on the world economy would be different, with a deeper recession around the world, but the impact on the Brazilian economy would still be positive on account of the possibility that would remain of agricultural exports to China.
Topic:
Agriculture, Economics, International Trade and Finance, Sanctions, Commodities, and Exports
Political Geography:
Russia, China, Europe, Ukraine, Taiwan, Asia, North America, and United States of America

6. Rewriting the Future of America’s Maritime Industry to Compete with China

Author:
Michael Roberts
Publication Date:
10-2023
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
For decades, companies outside the United States have dominated the international commercial shipping and shipbuilding industries. At various times since World War II, Japan, Korea, and certain European countries have been able to leverage their export-driven manufacturing economies and government support to become world leaders in commercial shipbuilding and major players in international shipping. The People’s Republic of China (PRC) has taken that strategy to a new level and now produces more than half the large commercial ships delivered annually, controls scores of seaports in dozens of foreign countries, and owns almost one-fifth of the global commercial fleet. American commercial shipbuilders and US flag shipping companies have long faced fierce headwinds in international markets and have seen support from the US government dwindle. The US reset its maritime policies in the 1990s when America was the sole superpower and the security benefits of a robust commercial maritime industry were in doubt. By the end of 2022, Americans owned only 3 percent of the 55,000 ships in the global commercial fleet, including just 178 large US flag cargo ships, 85 of which are committed to international trade (see tables 1 and 2 below for a breakdown of US and global commercial fleets). The emergence of the PRC as a challenger to America’s global leadership has forced sweeping changes in US policy and spending priorities to boost America’s economic and military security. This report recommends that the US reform its policies governing America’s commercial maritime industries because shipping and shipbuilding are core components of national power. These industries remain especially crucial in the twenty-first century, as international trade is more important to a healthy American economy today than ever before. Yet Americans have almost no control over the maritime logistics systems that feed the US economy. The pandemic-induced supply chain crisis showed how much damage can be done when those systems break down.
Topic:
International Trade and Finance, National Security, Maritime, Industry, Domestic Policy, and Supply Chains
Political Geography:
China, Asia, North America, and United States of America

7. Public responses to foreign protectionism: Evidence from the US-China trade war

Author:
David Steinberg and Yeling Tan
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
America's recent turn toward protectionism has raised concerns about the future viability of the liberal international trading system. This study examines how and why public attitudes toward international trade change when one's country is targeted by protectionist measures from abroad. To address this question, the authors fielded three original survey experiments in the country most affected by US protectionism: China. First, they find consistent evidence that US protectionism reduces Chinese citizens' support for trade. This finding is replicated in parallel experiments on technology cooperation, and further validated outside of the China context with a survey experiment in Argentina. Second, they show that responses to US protectionism reflect both a "direct reciprocity" logic—citizens want to retaliate against the United States specifically—and a "generalized reciprocity" logic that reduces support for trade on a broader, systemic basis.
Topic:
Economics, International Trade and Finance, Protectionism, and Competition
Political Geography:
China, Asia, North America, and United States of America

8. The Digital Economy Partnership Agreement: Should Canada Join?

Author:
Dan Ciuriak and Robert Fay
Publication Date:
01-2022
Content Type:
Policy Brief
Institution:
Centre for International Governance Innovation (CIGI)
Abstract:
The Digital Economy Partnership Agreement (DEPA) provides the most comprehensive template yet for a regional trade agreement tailored for the digitally transformed economy. The DEPA lays groundwork for discussions on critical areas that go beyond the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. This policy brief makes the case that joining the DEPA early would allow Canada to develop it so that it meets small, open economies’ needs and so that new provisions meet the values that Canada holds, and recommends areas for attention and collaboration with like-minded countries.
Topic:
International Cooperation, International Trade and Finance, Intellectual Property/Copyright, and Digital Economy
Political Geography:
Canada and North America

9. U.S. Strategy: Rebalancing Global Energy between Europe, Russia, and Asia and U.S. Security Policy in the Middle East and the Gulf

Author:
Anthony H. Cordesman
Publication Date:
05-2022
Content Type:
Special Report
Institution:
Center for Strategic and International Studies (CSIS)
Abstract:
The war in Ukraine has already shown how dangerous it is for the U.S. to assume that it can rebalance its forces to one region and count on a lasting peace or detente in others. It now is all too clear that U.S. strategy must continue to focus on Europe as well as China. What is less clear is the extent to which the Ukraine War is an equal warning that the U.S. must have a truly global strategy – and one that continues to focus on other critical regions like the Middle East. The sudden escalation of the Ukraine crisis into a major regional conflict and the need for political and diplomatic support in the UN as well as for sanctions are warnings that much of the U.S. success in deterrence and defense lies in creating long-term global diplomatic and political support as well as true and lasting strategic partnerships.
Topic:
Security, Energy Policy, International Trade and Finance, Hegemony, and Strategic Interests
Political Geography:
Russia, Europe, Middle East, Asia, North America, and United States of America

10. Securing Medical Supply Chains with Trusted Trade Partners

Author:
Meredith Broadbent
Publication Date:
04-2022
Content Type:
Special Report
Institution:
Center for Strategic and International Studies (CSIS)
Abstract:
There is bipartisan consensus on Capitol Hill and in the Biden administration regarding excessive dependence on Chinese manufacturing and production. An extension of this is that diversification of supply chains for certain medical products will make U.S. citizens more secure in fighting future infectious diseases. The highly disrupted international economic environment, reeling from supply and demand dislocations unleashed by the pandemic, U.S.-China trade conflicts, and war in Eastern Europe, is prompting certain countries in the Western Hemisphere to seize the occasion to aggressively market themselves as attractive hosts for foreign direct investment looking to move closer to the U.S. market. It is an opportune time for the United States to shape some of the larger forces of global economic disruption, including the movement of investment and production capital. It is time to forge enhanced trade links and diversified supply chains with friends and allies to promote health security, stronger economic and diplomatic engagement, commitments to exchange of data on production, and best practices in fighting disease. This paper breaks down CSIS’s analyses on the capacity for nearshoring in Canada, Brazil, Colombia, and Mexico.
Topic:
International Trade and Finance, Manufacturing, Medicine, and Supply Chains
Political Geography:
North America and United States of America