The WTO is 30 years old this year. While Donald Trump definitively overturned the multilateral trading system with his “reciprocal” tariffs, the WTO’s decline and its failure to change any of its decision-making rules pre-date Trump. Many of the problems facing the WTO, Keith Rockwell writes, lie with the organization itself: its rigid decision-making, dispute resolution, and operating procedures. There is much to dislike in the way the Trump tariffs were derived, but a real depreciation of the US dollar is required if the policy goal is to return the American economy to external balance, given the dollar’s overvaluation and persistent US deficit spending, Senior Research Fellow Stewart Paterson writes. As the global trade landscape outside the WTO reels from likely irreparable harm, Deborah Elms and Keith Rockwell sit with Bloomberg’s James Mayger to discuss how the world is trying to navigate the global chaos. Plus, don’t miss Michael Enright writing on how Volkswagen, GM, and Tesla rose and fell in the world’s largest auto market China, and see what we have been reading on ongoing US trade negotiations.
TRADE POLICY
Fixing the broken WTO
Keith Rockwell 6 May 2025
While Donald Trump could justifiably be cast as the villain for overturning the multilateral trading system with his “reciprocal” tariffs, the WTO’s decline and its failure to change any of its decision-making rules long pre-date 2016. Many of the problems facing the WTO lie with the organization’s decision-making, dispute resolution, and operating systems, Senior Research Fellow Keith Rockwell writes. While non-discrimination and inclusiveness are noble features of the WTO, the practical application of these principles has deadlocked negotiations. The WTO is in desperate need to evolve and reform. Rockwell proposes some ways.
The best part of the Trump effect might be a weaker US dollar
Stewart Paterson 6 May 2025
There is much to dislike in the way the Trump tariffs were derived, not least the focus on trade in goods to the exclusion of services and on bilateral trade positions. But a real effective depreciation of the US dollar is required if the policy goal is to return the American economy to external balance, given the dollar’s overvaluation and persistent US deficit spending, Senior Research Fellow Stewart Paterson writes. Real exchange rate adjustments could restore global trade patterns to a healthier balance, but supply-side reform and higher investment in the US are also required to meet the self-sufficiency Washington desires.
As the global trade landscape reels from likely irreparable harm, the Hinrich Foundation’s Trade Policy Head Deborah Elms and Senior Research Fellow Keith Rockwell sit with Bloomberg’s senior China correspondent James Mayger to discuss how the world is trying to navigate the global chaos of tariff and other policy changes imposed by the Trump administration. This webinar was organized by the Association of Foreign Press Correspondents-USA in partnership with the Hinrich Foundation.
Is there a future for foreign auto firms in China?
Michael Enright 6 May 2025
Foreign auto companies helped propel the Chinese industry to world leadership. Now they are falling behind in a market that has become critical to their global success. Their experiences show the challenges of keeping up with the pace of change in the China market and competing with China’s state-sponsored industrialization. FDI expert Michael Enright takes us through how Volkswagen, GM, and Tesla rose and fell in the world’s largest auto market.
The prospects for successful negotiations by the US remain uncertain, given questions about how the US can manage multiple trade deals simultaneously. Meanwhile, concerns are rising over the potential deflection of Chinese export to third countries, along with higher prices and shortages for American consumers. Check out what we have been reading.
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