Tariffs, Trade Wars, and the New Global Economy
The postwar system of global cooperation and robust institutions has been crumbling. And with Donald Trump’s election, the postwar economic order is poised to change for good.
It will be replaced by “modern mercantilism.” Today, modern mercantilism is built on four tenets: First, the state has a large role in orchestrating the economy to increase national wealth and strength. Second, trade balances are an important determinant of national wealth and strength, and trade deficits should be avoided. Third, industrial policy is used to promote self-reliance and defense. Fourth, national corporate champions are protected.