By popular demand, here is a bitesize Q&A on tariffs. In short, there are no winners from a trade war, but it is not too late to avoid a global recession. For now, ‘wait and see’ may be the best strategy both for central bankers and investors. 1. Do the new ‘reciprocal tariffs’ make any … Continue reading Thirteen questions and twelve answers on Trump’s tariff war
Category: Applied economics
Trump’s ‘reciprocal tariffs’ make no economic sense
The Trump administration’s decision to impose additional tariffs on imports into the US is bad economics, motivated at least in part by bad politics. TTo recap, the new “reciprocal tariffs” will be set according to the 2024 figures for US trade in goods - completely ignoring trade in services. They are based on a formula … Continue reading Trump’s ‘reciprocal tariffs’ make no economic sense
Why the UK should cut tariffs on the US, not raise them
The siren calls for retaliation against the US if President Trump imposes new tariffs on the UK remind me of this exchange from 'Braveheart'.... Longshanks: Archers! English Commander: I beg pardon, sire. Won't we hit our own troops? Longshanks: Yes... but we'll hit theirs as well. The serious point here is that tariffs hurt people … Continue reading Why the UK should cut tariffs on the US, not raise them
Is defence spending good for growth?
The right amount to spend on defence should, of course, primarily be a decision based on the benefits to our security. But could more defence spending also be good for growth? The short answer is ‘not necessarily’. The overall impact on the economy will depend on how the additional spending is financed, and on whether … Continue reading Is defence spending good for growth?
Plain-speaking Economics 