Economic Integration or Trumponomics: The Choice is a Big Question for Developing Economies

Abstract

Economic integration is an agreement among countries in a geographical region or unification of economic policies between different states aiming to reduce and ultimately remove tariff and non-tariff barriers on trade. The fruit of globalization is the tremendous rise of economic integration as globalization loosens barriers among the nations through reduction in cross-border duties and eases trade policies. Trumponomics is defined as the economic policies of US President Donald Trump that prefers high import tariff to bring “America First.” There is a debate among the researchers about the choice between free trade and protection or imposition of tariff. Some of them prefer free trade because during the start of the great depression, the world economy experienced a huge shift toward protectionism. Choice between no-tariff and tariff represents a prisoner’s dilemma situation whereby each player’s best response is to employ tariffs. This results in a sub-optimal outcome for all where the total volume of world trade falls, which is a Nash solution. The present chapter deals with theoretical discussions on trade war and throws light on the developing country’s choice between non-protectionism supported by globalization and Trump’s protectionism.

Citation

Bhattacharya, A. (2021), "Economic Integration or Trumponomics: The Choice is a Big Question for Developing Economies", Das, R.C. (Ed.) Global Tariff War: Economic, Political and Social Implications, Emerald Publishing Limited, Leeds, pp. 271-279. https://doi.org/10.1108/978-1-80071-314-720211021