The global trade status quo is shifting. Will the U.S. be left out?
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What is the current state of global trade and U.S. influence?
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Oh, you were looking for macroeconomic stability, were you? Huh. From American public media, this is Marketplace.
In Los Angeles, I'm Kyle Rizdahl. It is Tuesday today, the 20th of January. Good as always to have you along, everybody. One does not have to be a trained observer of the international order to know that something is up. You can kind of feel things changing under your feet, right? Canadian Prime Minister Mark Carney said in a speech today at the World Economic Forum in Davos, and this is a quote, we are in the midst of a rupture, not a transition. The old order he went on is not coming back. Canada, in fact, made a big trade deal with China the other day. The European Union and the South American trading bloc Mercosur finally signed a free trade agreement that has been years in the making. And as President Trump threatens tariffs and more to take Greenland, traditional American allies are having an economic moment.
Marketplace's Elizabeth Troval has more on how the tectonic plates of geoeconomics are shifting.
Today, the U.S. is paying the political price after decades of globalization. This didn't happen out of a vacuum, says Rice University's David Gantz.
A lot of people have been left behind and governments have not done a very good job of dealing with the people left behind from the shift in manufacturing elsewhere.
But as Bill Reinsch with the Center for Strategic and International Studies points out, President Trump's protectionism isn't stopping globalism.
Trade is increasing, but it's rearranging or realigning. And what's happening is basically countries are moving on without the United States.
Look at the EU and South America, China and Canada, the UK and India.
We're not a reliable partner anymore. And there's no better example of that than what he's doing with his Greenland tariff issue.
So far, Americans haven't yet seen a major retaliation from our trading partners. But Reinsch says decisions the U.S. makes today could hinder future economic growth.
We're a mature, slow-growth economy. If companies here want to grow fast, they have to export. And what Trump is doing is effectively cutting them off from that.
There's the global financial system to think of, too. The Brookings Institution Doug Rediker says, for now, there is no substitute for the U.S. dollar.
But if you accelerate the rest of the world's search for an alternative, they're going to find one. And at that point, once the dollar ceases to be the dominant sole global trading and reserve currency, then a lot of things Americans have taken for granted start to go away.
And of course, there's the impacts on American workers and businesses.
It's literally prices. It's job opportunities. It's availability. It is supply chain disruptions.
He expects the U.S. is in store for more trade war-related pain, not less. I'm Elizabeth Troval for Marketplace.
The global trading day started with a bond market rout in Japan, and the volatility was off and running around the world. We will have the details when we do the numbers.
There's no shortage of marketplace adjacent things to watch at the Supreme Court these days. We are expecting a ruling any day now on President Trump's tariff palooza of April last, specifically whether the president, any president, can tax American businesses and consumers just because he feels like it. And tomorrow, the court is going to hear argument on President Trump's attempt to fire Fed Governor Lisa Cook. Lots to watch, as I said, but what to watch for. Leah Lipman is a professor of law at the University of Michigan. Leah, it's good to have you back on.
Thanks so much for having me.
We had you here a year or so ago before a big Federal Trade Commission case, Humphrey's executor and who the president could fire when and if he feels like it or not.
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Chapters
4 chapters
1
What is the current state of global trade and U.S. influence?
0:00–7:53
2
How is the U.S. perceived as a trade partner by other nations?
7:53–9:59
3
What are the implications of President Trump's protectionist policies?
9:59–17:21
4
How does the housing market reflect the current economic climate?
17:21–27:40