US protectionism against the G20 is building momentum

Subject

Protectionism in the G20.

Significance

Earlier in July the Centre for Economic Policy Research released the 21st Global Trade Alert (GTA), “Will awe trump rules?”. It asks whether the shock and awe of Donald Trump’s inauguration as US president after a highly nationalistic and anti-trade election campaign has changed not only US protectionist dynamics, but also the state of play in the rest of the G20. Using a broader database than the WTO, the alert shows protectionist measures have risen worldwide since 2008, despite the pledges of G20 leaders to “fight protectionism”. The report also finds that US protectionism has increased this year.

Impacts

• French President Emmanuel Macron has boosted the drive for global cooperation, but nationalism remains strong in many countries.
• Trump could use executive powers in a more sweeping fashion if he cannot deliver changes via legislation.
• US opposition to reforms of international financial institutions could reduce the momentum behind global cooperation.
• The WTO is reviewing several cases the previous US administration began against China -- extreme escalation could trigger US WTO withdrawal.