Worlds Apart

Columbia University Professor of Economics Arvind Panagariya on US trade war

The trade tariffs that the US has allegedly imposed to protect its national security interests have prompted its long-time allies and trade partners to retaliate in kind. Arvind Panagariya, professor of economics at Columbia University, talked about American protectionism and the escalating trade tensions.

Unleashing tariffs is “certainly not the longstanding practice by the US,” Panagariya said. “This is a new game the US has initiated.” If President Donald Trump “continues on the current path, what we would do to this trading system is only damage it in a major way.”

It is “a huge backtracking” on the part of Washington, as it is the liberation of commerce which “gave the lead in establishment of current multilateral trading system.”

Panagariya noted that “your own tariffs also do hurt you and you don’t want to carry it too far.” He added that “part of the persuasion has to come from within the US,” from the American industries that use imported steel and aluminium.

There is “some element” regarding the trade dispute’s consequences that “have not been thought through hard enough, but some of it may also be posturing,” Panagariya said. “President Trump, coming from the business world, believes in cutting a good deal for himself.”



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