Can the Global Economy Be Healed?

"Although the U.S. and China have agreed not to escalate their trade war, Trump's blanket tariffs and the rest of his America First agenda remain in place, and many economists are despairing about the demise of an open trading system that they regard as a key driver of prosperity. But Rodrik, who shot to prominence in the nineteen-nineties as a critic of the untrammelled globalization that helped give Trump his start in Presidential politics, is more upbeat."

"His optimism is based partly on his conviction that Trump's policies will fail to restore American manufacturing to its past glory and raise living standards, which will create space for a different approach. But Rodrik also believes there can be no return to the pre-Trump global system, which relied on one-size-fits-all trade rules enforced by transnational agencies such as the World Trade Organization."

A progressive alternative for inclusive, sustainable economies remains possible as global economic ideas and practices are in flux. Trump's tariffs and America First policies are unlikely to revive past U.S. manufacturing or broadly raise living standards, creating political space for different domestic strategies. The pre-Trump model of one-size-fits-all trade rules enforced by transnational agencies is no longer viable, freeing nations to pursue tailored policies. Three central economic challenges require attention: rebuilding the middle class in Western countries, reducing poverty in low-income countries, and addressing climate change through coordinated domestic and international action.

Read at The New Yorker