Stephanie J. Rickard
London School of Economics
London School of Economics
I occasionally comment on events in the global economy including Trump's steel tariffs, Brexit, the International Monetary Fund, and the World Trade Organization, which I discussed in an interview for BBC Radio 4's flagship Today programme. You can also find me on Twitter @SJRickard.
Why did Trump agree to a temporary hold on further China tariffs?
In The Washington Post's Monkey Cage, I argue that Trump's trade war with China is far from over, despite his agreement to a temporary hold on further tariffs. The rules governing national U.S. elections make politicians especially responsive to geographically concentrated groups — such as American steel manufacturers and farmers. Trump, with his sights set firmly on the 2020 election, hopes to appeal to both farmers and steelmakers by implementing tariffs on steel and funding subsidies for farmers.The Irony of Trump's $12-billion farm subsidies
While researching my new book on subsidies, Spending to Win, I came across many different types of the financial aid. Some helped producers hurt by foreign trade. Others assisted economically disadvantaged regions. None were intended to offset damages inflicted by domestic tariffs, like Trump’s proposed US $12-billion farm subsidies. Trump’s aid program is an attempt to compensate farmers for income lost from foreign tariffs imposed on US goods in response to Trump’s own tariffs. But if Trump’s tariffs on steel, solar panels, and other goods are hurting farmers, the obvious solution is not an expensive $12 billion subsidy program. Instead, removing the offending tariffs and deescalating the mounting trade war would be a far better solution.The Politics Behind Trump's Steel Tariffs
In March 2018, Trump fulfilled his campaign promise to steel workers by imposing tariffs of 25% on steel imports into the United States. Such promises are a useful vote-winning tool in plurality electoral systems when the beneficiaries of such protection are geographically concentrated, like the American steel industry If, however, the US steel industry had been more evenly dispersed across the country, promising tariffs for the industry would have “over bought” support in some states where Trump did not need any additional votes to win. In this way, providing economic benefits to geographically diffuse groups is an inefficient election strategy in plurality systems.
Trade
Adjustment Assistance: Stumbling block or
stepping stone?
The United States' Trade Adjustment Assistance (TAA) program helps citizens made worse off by increased international trade. Yet, I find that legislators whose constituents gain from trade are the ones most likely to support TAA funding. Even Republicans, who often oppose spending increases, are willing to support TAA funding when a large portion of their constituents stand to gain from freer trade. This pattern suggests that TAA helps to widen the coalition of support for free trade. However, in 2015, TAA proved to be more of a stumbling block than a stepping stone to liberalization.
Greece’s creditors are paying the price for not relaxing their conditions prior to the 2015 election
Britons favour bailouts for countries with strong ties to the UKGreece and the International Monetary Fund (IMF) deadlocked over the release of bailout funds to assist the country. The impasse could have been avoided if the IMF pursued the strategy they used in previous loan programmes. I find evidence that the IMF typically relaxed loan programme requirements in the lead up to democratic elections in borrowing countries. By failing to do so in the Greek case, the foundations were set for Syriza to come to power on an anti-austerity platform, making any compromises far more difficult.
Who supports international bailouts, and why? Using survey data from the UK, I find that public support for international bailouts depends on the identity of the recipient country. British citizens are more supportive of loans to countries with closer economic links to the UK.
Opposition to free trade agreements can be reduced by government-funded compensation programs. In the United States, Trade Adjustment Assistance (TAA) provides financial aid to workers who lose their jobs or experience a reduction in their income due to trade. Opposition to the TTIP agreement may soften if legislators agree to fund programs, like TAA, that compensate individuals for economic losses stemming from international trade agreements.
Some democratic countries are better international citizens than others. In new research, I show that the more proportional a country’s voting system is, the more likely it is to honor its international commitments on trade issues.