Industrial policy is the ghost in capitalism’s machine — always present, rarely acknowledged. As China’s rise as a strategic peer competitor spurs a return to industrial policy in Washington, Peter Draper traces its provenance and persistence, and charts the Trump administration’s use of trade policy as its primary industrial policy toolkit.
Nearly every week, the Yale Budget Lab estimatesthe price effects of all US tariffs implemented this year. As of its latest available report, the Lab estimates that US consumers will face an overall average effective tariff rate of 18.6%, the highest since 1933. Visual Capitalist depicts the Lab’s findings on where the tariffs will hit hardest.
The WTO and the Hinrich Foundation are jointly hosting an online roundtable on 2 September on business priorities for WTO reform, featuring senior executives from business leaders from tech, logistics, manufacturing, and other sectors. A few limited seats remain available; register here.
Yuka Hayashi, Vice President of The Asia Group, sits down with former Wall Street Journal senior editor Paul Beckett to unpack the effects of the Trump administration’s tariffs on automakers around the world, in an interview hosted by the Association of Foreign Press Correspondents-USA and supported by the Hinrich Foundation.
How economies respond to US tariffswill be a critical question for global trade going forward. The IMF modeled the impact of various responses. Read our analysis of the report.
TRADE POLICY
The Ghost in Capitalism’s Machine: Industrial policy returns
Peter Draper 19 August 2025
“Industrial policy is the ghost in capitalism’s machine — always present, rarely acknowledged,” Peter Draper, executive director of the Adelaide-based Institute for International Trade, writes in a paper for the Hinrich Foundation. Peter, also Jean Monnet Chair in Trade and Environment, a Trustee of the International Chamber of Commerce’s research foundation, and Senior Fellow at the European Centre for International Political Economy, tracks the provenance and persistence of industrial policy’s comeback as geopolitical contestation has spurred the US – no newbie to industrial policy – to shift decisively toward an embrace of a toolkit until recently more closely associated with the Chinese state.
Nearly every week, the Yale Budget Lab estimates the price effects of all US tariffs implemented this year. As of its latest available report, the Lab estimates that US consumers will face an overall average effective tariff rate of 18.6%, the highest since 1933. This means an average per household income loss of US$2,700. Visual Capitalist depicts the Lab’s findings; for consumers, the increases will be highest in clothing, food, and autos.
WTO-Hinrich Foundation panel on business priorities for WTO reform
WTO reform is at the top of the agenda for its next Ministerial Conference in March. The WTO and the Hinrich Foundation are jointly hosting an online roundtable on Tuesday, 2 September, at 9 am EST / 3 pm Geneva time / 9 pm Singapore time, moderated by the WTO’s appointed Facilitator for WTO Reform, Ambassador Petter Ølberg of Norway, and Chuin Wei Yap, research director for the Hinrich Foundation. The panel features senior executives from business leaders including in tech, logistics, medtech, financial services, and other sectors. A few limited seats remain available for registration here.
Yuka Hayashi, Vice President of The Asia Group, sits down with former Wall Street Journal senior editor Paul Beckett to unpack the effects of the Trump administration’s tariffs on automakers around the world amid heightened global trade tensions, in an interview hosted by the Association of Foreign Press Correspondents-USA and supported by the Hinrich Foundation.
How economies respond to US tariffs will be a critical question for the world economy going forward. In a timely working paper, the International Monetary Fund provides an analysis on what are the consequences for global trade if more economies decide to retaliate, adopt industrial policies to support domestic producers, or expand market access opportunities through negotiation of new trade agreements. Read our analysis of the report.
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