Trade wars are good and easy to win. Really cool economics data viz work from the NY Times, however sad the topic.
An interesting back of the envelope analysis of why Brexit and Trump’s tariffs are actually different. It’s interesting to think in terms of little economic diagrams - I don’t do this often enough anymore.
Trying to understand why tariffs are bad, and get some sound reasons to reject the US’s current position on trade, I went back to look at what Russ had to offer on the classical trade theory. He gives a lot of really good and really basic examples on the points of returns to scale and comparative advantage, and debunks protectionism as a good long-term strategy.
If you believe in specialization, you should believe Krugman’s argument on trade wars. He basically says there’s two reasons for the stock market’s current drop re the potential trade war: 1) Efficiency loss imposed by artificial costs on international trade, which undo specialization (tariffs). 2) Stranded assets, which are worth more on paper than on the market. I’d say there’s a third thing in play here: behavioral overshooting. In any case, the stranded asset thing is interesting. It isn’t just the soon-to-be unproductive factories in China that lost value, but also their counterparts in the US, like real estate owned by foreigners.