Benn Steil

Geo-Graphics

A graphical take on geoeconomic issues, with links to the news and expert commentary.

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Showing posts for "Trade"

Twin Deficits

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twins21

The U.S. federal deficit has increased significantly since the start of the recession, as tax revenues have fallen and spending has increased. But the trade deficit has actually shrunk, reaching its lowest level for ten years in May. So while the risks associated with dependence on external financing have declined, there are new risks stemming from increased fiscal borrowing. Read more »

Imbalances

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2009624crisisguidestatic2

The early 1990s witnessed trade tensions between the United States and Japan, even though the U.S. current account deficit stood at about 1% of GDP and Japan is a democracy.  As our chart shows, the world is now trying to manage much larger imbalances, and two of the major surplus countries are not democracies.  Resolving these imbalances may be more difficult because of the dependence on exports in China and Germany, the two leading surplus economies. Read more »

Trade Collapse

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200969tradecollapsecycleupdate

The collapse in U.S. trade associated with the current downturn far exceeds the fall in any other post-war recession. It tracks the fall in trade observed in the 1930s, though there are now signs of stabilization. So far this collapse has been driven by economic factors, such as the decline in demand and trade financing, but as the world economy contracts the risk of protectionism increases. Read more »

Trade Troubles

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The WTO has forecast that world trade will decline by 9% this year, the largest fall since World War II and the first decline since 1982. The severity of the contraction in world trade not only exceeds the post-WWII recession average, but is also deeper than in any post-war recession. In response, G20 leaders extended their agreement not to impose protectionist trade barriers to the end of 2010 and promised $250 billion in trade finance. Read more »

Trade Troubles

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The World Bank is predicting a 2.1% fall in world trade for 2009, the first decline since 1982. As our chart shows, East Asian exports are slowing in tandem with Western world imports. Although G20 leaders pledged to maintain open trade at the November 15th summit, there is concern that politicians will exacerbate the problem by turning inward. Already Russia and India have raised tariffs and China is under pressure to take steps to support exports. Read more »