Debate on if this means the end of the post-war free trade world

A mixed set of President Trump’s tariffs, partly designed to protect the US industry, raise money and – as we saw – are used as a conversation.

The Republican has already imposed tariffs on Imports from Chinaannounced plans on 25% duty on all imports of steel and aluminumand threatened to place 25% tariffs on Canada and Mexico. We do not yet know how far it will go, but if what is already on the table will come, it will increase the average tariffs to the highest since the 1940s, which signals the new section for global trade.

From the end of World War II, in 1945, tariffs were generally considered as bringing the prices for the consumer, a smaller choice and – among the inevitable revenge – retreating in the fields they had to defend. But we turn your back into this era?

I have conducted a discussion with two economic experts in trade policy to defeat the consequences of Trump’s policy in America and the world, and studied different views on which one of us could become the biggest winners or losers.

Meditis Croles He is a professor of economics at the University of Cambridge. She believes that tariffs can lead to a much greater economic burden on the lowest income.

Jeff Ferry He is the chief economist for coalition for prosperous America. He believes that tariffs can cause growth and restore the US production industry.

Dharshini David (DD): President Trump called tariffs as “the most beautiful word in the dictionary” – which is really intriguing. What’s the attractiveness for him?

Jeff Ferry (JF): I think Trump made it clear that he believes that tariffs are a “beautiful” thing for several reasons.

First, because they can revive and restore the US production industry. He also sees that the United States is conducting a huge trade deficit. In 2024, we had a $ 1.2 trillion trade deficit, which means the rest of the world, and, in particular, surplus countries, bring a large amount of income, selling to the US market. This gives the US a powerful negotiating tool and we have seen it use that drugs and immigration with Canada and Mexico over the past few days.

Meditis Croles (MC): My assumption is that in the last 40 years what is really concerned with Trump is a decrease in production jobs in the US.

He noted that many jobs that previously existed in the United States moved to other low wages, such as Mexico and China, and I think his hope would be that, by imposing tariffs, he can stimulate job creation.

DD: We know that countries also think of retaliation measures. To what extent will these measures affect Trump’s economic goals?

Jf: Undoubtedly, the tariff policy combined with the policy of the investment and growth policy and policy, will grow the US economy and do better work to ensure productivity growth than we have seen over the past 25 years, what we have seen in the last 25 years Honestly, they were inappropriate for traditional American standards.

500 years of history shows that the profession of economics in its obsession with a short -term equilibrium has made a service not only to American workers and American people, but in fact, the British people and British workers – and workers in many countries.

DD: In the post -war era, we saw the destruction of trade barriers and the idea that globalization was good. Now we see a back reaction against this?

Jf: We see a historical shift from consensus after World War II, which stems from a period when America is ahead of the rest of the world – and America was very much worried about the communist threat.

So what you call “free trade” and I would call Bretton Woods A fixed course consensus was designed to support and even subsidize European economies and other economies.

Now we have moved to a new phase when in the 1970s, of course, the US economy began to break, and China has risen to become the number one production power, basically using all the rules in the system.

We need a new system.

MC: I have another diagnosis of what happened in the last story.

Over the last 40 years, it is clear that the greater protection is very popular. From 1981 to 1994, the US with limited imports of cars from Japan, and this eventually had two consequences.

In the first place, this raised the price of cars for Americans. Secondly, ultimately, this has led to the investment of Japanese manufacturers in the US, and today there is a bright automotive industry in the US. You can support the American industry much more directly by direct state support.

Trump now has created an uncertainty that Canadian manufacturers will gain access to the US market in the future. And since Trump has started its threats in 2018 to impose tariffs on China, large corporations can review plans to expand operations in Canada or Mexico to serve the US market. These trading partners will roll back real economic activity.

Dd: Medit, Trump acknowledged that in the short term, there may be a “little pain” because, as you mentioned, tariffs usually mean higher prices.

MC: A study on what happened in Trump’s first tariffs in China in 2018 showed that in the first two years most of the increase in expenses was absorbed by importers and distributors, and this was not transmitted to consumers. However, prices rise usually comes more gradually.

Once you realize that the tariff is constantly, the manufacturer realizes that everyone will need to pay, and they gradually increase prices.

One of the problems that economists have is people who buy a lot of goods, not services, as a rule, people with a smaller income level. So, if you put the tariff on things such as children’s coaches, backpacks and clothing, these types of consumer items, you really place a much larger tax burden on the lowest income of people in the country, not the one who spends his money and private Education for children.

Dd: Jeff, are you concerned about the global trading war that can arise on Trump’s target?

Jf: We have been waging a trade war since 2001 as China has entered the world trade community. The trade war is long -standing. Now America is taking measures, and many people throw their hands not because they are concerned about the trade war, but because they are concerned, they may lose the valuable market for their own products.

But I want to go back to consumer prices.

People focus solely on negativity. The purpose of the tariff is to stimulate the home industry, so on the positive side you create a brand new investment in the domestic industry. On the negative side you get rising prices. Thus, it is critical of the numbers in both cases.

What we know from the first round with Trump tariff, between 2018 and 2019 is the price of tariff products, such as steel, but companies that sought to create new factories such as steel factories that hired several hundred people – great Workers for people who say do not have a higher degree.

The current stage of globalization, which began around 1990, was just a big mistake. The idea that the United States can compete with Mexico’s wages, especially with manufacturing workers, was just crazy.

Dd: Let’s see it. Do you agree that the economy with a high salary, frankly, was not a great idea from the 1990s?

MC: I understand that Jeff’s item is that the only problem of the president should be the welfare of Americans. But between 1990 and 2023, the number of people around the world who live in extreme poverty, less than $ 2.15 (1.75 pounds) decreased from two billion to approximately 700 million. More than a billion people who come out of poverty are a strange achievement of humanity.

It is quite clear to everyone that the benefits of globalization were not equal to help them in American society.

Where I am different from Trump, I think there are more effective tools. You need an industrial policy or subsidies in production. American productivity is so high because we are constantly investing in work savings, but the consequence is that less qualified remained behind and their lives are significantly worse than it was thirty years ago.

Jf: I agree with one hundred percent of the Merved.

Dd: It’s fun. When we see what trading barriers, which Trump wants to create, what does that mean for this equality?

MC: As soon as you start putting barriers between the countries, you create a lot of opportunities for what in the world of economy we call monopoly profit. Once you limit your entry, existing manufacturers can make prices and use consumers.

If the US goes into a trade war with China, what will happen from countries, the US is not interested in a trade war?

If the US and China deepen their trade war, it can affect the participation of the Sahara and China supply chains, that is, it will be one of the areas of the world, which carries part of this basic use in the main blow from this. Trade War.

Thus, the effects of overflow can be very, very negative.

Dd: Jeff, is the price worth paying? What influence could we see on the growth?

Jf: I don’t think about it as a price that should be paid, I think about it as the evolution of the world system, where I hope we get a higher growth everywhere. And it is here that I am different from the main economy, which focuses too much on trade and minor performance.

The world grew through the success of the industry. The story from 1900 to 1970 is largely related to the automotive industry. What you saw was a huge income about performance when Henry Ford and all its successors invented and developed mass production. You saw that wages are increasing and increasing, and we had the most prosperous economy in the world.

So, we need an industry growth, and if you look at the basis of national security, we cannot depend on China for as many goods as we are today. We are too dependent on China here in the US, Europe is too dependent on China. So what is the resolution? Well, the resolution is quite obvious – we need to make certain goods here in the US.

Production: Rosemary McCabbi, Roda Buukenan and Hariet Whitehead

Best picture: Getty Images

This transcript was edited for clarity and brevity.

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