What a year.
2020 has been the toughest year in decades. The COVID-19 pandemic upended lives and led to suffering and death around the world. The health and economic crises prompted debates, research, and soul-searching among experts, policymakers, and ordinary citizens. Unsurprisingly, most of what the Peterson Institute for International Economics produced this year dealt with how the pandemic hurt countries and what could be done to protect people and rebuild the global economy. We also kept an eye on trade, as President Donald Trump’s trade war continued to make headlines, and other macroeconomic and regional trends. Here are the most read pieces we published on our site in 2020.
The “phase one” trade deal between the United States and China was signed on January 15, 2020. Our most read piece this year, a PIIE Chart by Chad P. Bown, was published on May 18, 2020 and is updated monthly, tracking China’s monthly purchases of US goods pursuant to commitments by China in the deal. It relies on data from both Chinese customs (China’s imports) and the US Census Bureau (US exports). It then compares those purchases with the legal agreement’s annual targets, prorated on a monthly basis based on seasonal adjustments. At the end of the year, the data indicate that China has fallen well short of meeting its commitment. Throughout 2020, there has been no sign of a “phase two” deal.
David Wilcox and Donald Hammond wrote this piece in late March urging the federal government to use all channels available to get direct cash payments to Americans as quickly as possible as Congress scrambled to put together a coronavirus rescue package. With a second bill this December, which also includes direct cash payments, Congress should heed Wilcox and Hammond’s advice to use the income tax administration system, the Social Security benefits system, and other federal assistance programs to get the relief out quickly.
Also in late March, Chad P. Bown addressed widespread fears that Trump administration’s demonization of China over the COVID-19 pandemic would curtail shipment of Chinese personal protective equipment supplies to the United States. Chinese exports of essential hospital supplies did decline in the first two months of 2020, as expected with the country fighting the pandemic as well, but only by 15 percent. And the factors behind the dip were complex, and not simply a case of China hoarding the equipment for itself or retaliating against the Trump trade war.
In mid-March, Chad P. Bown explained how President Trump’s tariffs created trouble for American medical professionals who needed imported medical products from China and other countries to fight the pandemic. The Trump administration quietly announced on March 10 and 12, 2020 that it would temporarily reduce some tariffs imposed on Chinese products to treat COVID-19. But those actions, which effectively acknowledged that trade wars can endanger public health, covered only a handful of urgently needed products. Bown argued that during the crisis, the United States needed to be more open and cooperative on trade.
In June, Jason Furman and Wilson Powell III posted their first monthly analysis of the 2020 US labor market. They make two adjustments to the US Bureau of Labor Statistics data to generate two measures of the unemployment rate in addition to the official unemployment rate—the "realistic unemployment rate" and "full recall unemployment rate." These measurements reclassify some workers and account for changes in labor force participation and reported temporary layoffs. You can find the most recent analysis for the November job market here.
As part of our April PIIE Briefing “How the G20 can hasten recovery from COVID-19,” Anabel González explained how trade—both imports and exports—is a powerful, cost-effective tool to mitigate the potentially devastating effects of COVID-19. She urged G20 countries to quickly implement trade policies that can protect lives across the world by improving access to affordable medical supplies. She also pointed out that trade will be key to the recovery from the pandemic, and G20 countries should prepare the groundwork for a revitalized global trade framework to help rebuild the world economy.
Chad P. Bown explained that a new round of “national security” tariffs on aluminum and steel imports in January were, for the first time, imposed to help an industry suffering because of previous tariffs. Economists refer to a second round of tariffs on products hurt by earlier duties as "cascading protection." Such cascading barriers are worrisome for their potential to escalate protectionism as well as their immediate economic impact.
In light of the pandemic, Douglas A. Irwin took stock of global economic integration, supply chains, and globalization. He tracked the evolution of modern globalization through five stages, using global trade, measured by the ratio of world exports to world GDP, as a proxy for economic integration. We are now, he wrote, in an era of “slowbalization,” or peak globalization. COVID-19 simply adds further momentum to the deglobalization trend. An inward turn by countries around the world would not spell the end of globalization, only a partial reversal. But undoing the resulting damage is likely to prove difficult.
Also part of the April PIIE Briefing, “How the G20 can hasten recovery from COVID-19,” Christopher G. Collins and Joseph E. Gagnon proposed aggressive and coordinated policy responses within the G20 and the wider world to aid vulnerable economies and dampen excessive currency swings. Key measures include central bank swap lines, increased resources for international financial institutions, and avoiding protectionist policies. They also said direct coordinated intervention in foreign exchange markets should be mutually agreed between the buying and the selling governments and that interventions should not be undertaken to achieve any specific level of exchange rates but rather to lean against disorderly movements.
Sneaking into the last spot of our top ten most read pieces published this year is our latest digital feature on economic inequality in high-income economies. Published in November, this in-depth guide uses infographics, charts, pictures, and text to explain how economic inequality has been rising for decades in advanced economies and how COVID-19 has exacerbated existing vulnerabilities. It lays out an array of policy options governments can adopt to mitigate the growing gap between the rich and the poor.