From the beginning to the end of 2019, the Trump administration's trade wars have dominated international economic news. Unsurprisingly, this subject has led the list of the most popular features on the Peterson Institute for International Economics' website, followed by debate over economic inequality, public debt, China's crackdown on Hong Kong, and new concerns in the world of cybersecurity. Here are the most read pieces we published on our site in 2019.
Our most read piece, published in late August but has since been overtaken by more recent events, was Chad P. Bown's analysis of the US-China trade war following a flurry of summer trade announcements. He analyzed what products imported from China to the United States and vice versa would be covered by scheduled tariffs, average tariff rates on US imports in China compared with imports from the rest of the world, and more. You can find an updated analysis of where things stand in the trade war as of December 19 here.
While President Trump drove trade policy with a tariff stick, China was offering the rest of the world carrots. In June, we found that China increased tariffs on imports from the United States to an average of 20.7 percent. Meanwhile, tariffs on products China imported from the rest of the world were on average just 6.7 percent.
In October, we hosted the 5th annual "Rethinking Macroeconomic Policy" conference on the topic "Combating Inequality: Rethinking Policies to Reduce Inequality in Advanced Economies," co-organized by Olivier Blanchard and Dani Rodrik (Harvard University). The two-day event covered inequality in advanced countries in many forms—the political, philosophical, and moral implications of inequality, distribution and redistribution of financial capital, labor market tools and policies, social safety nets, and more. The conference generated a wide variety of concrete policy ideas that can be used to lessen economic inequality. A summary by the co-organizers can be found here.
Thanks to the American Economic Association, we were able to post in full Olivier Blanchard's original speech on new theoretical foundations for how to think about fiscal policy and debt. Ben Bernanke, former chair of the Federal Reserve, now at the Brookings Institution, provided the introduction.
This PIIE Chart, originally published in September, was updated through December. It compares the evolution of US average tariff rates on imports from China and Chinese average tariff rates on imports from the United States. The trade war proceeded in four steps since early 2018, explained in the chart.
Amid political unrest in Hong Kong (before the protests reached their peak), Tianlei Huang wrote that economically, China needs capitalist Hong Kong. Preserving the unique economy means more than allowing free enterprise—it means a strong and unwavering commitment to its rule of law, the key to Hong Kong's success.
Expanding on their previous arguments on public debt and deficits, Olivier Blanchard and Ángel Ubide addressed counterarguments that arose in the first half of 2019. Blanchard and Ubide said economists should not pretend debt is catastrophic if it is not and that interest rates will likely be low for at least the next few years. Their bottom line is that the tradeoff between debt consolidation and activity has dramatically changed and that fiscal policy should tilt in an expansionary direction.
As the trade war continued through 2019, Chad P. Bown examined the changes that came to US trade policy with China when two rounds of tariffs, scheduled for September 1 and December 15, were announced. While tariffs planned for December 15 ended up not going into effect, he covered average tariff rates, tariff coverage, impact on retail, and more.
Claudia Biancotti wrote about how the proliferation of Chinese social media around the world could pose a security problem for users. She used the app TikTok as an example and explored what Western countries have done to counter this threat, including the Committee on Foreign Investment in the United States (CFIUS), the US Foreign Investment Risk Review Modernization Act (FIRRMA), and the European Union's General Data Protection Regulation (GDPR).
In his presidential address to the American Economic Association in January, Olivier Blanchard explored the costs and benefits of public debt in the current environment of low interest rates. In this Policy Brief, published shortly thereafter, he found that because interest rates are lower than growth rates, fiscal and welfare costs are likely lower than typically expected.