Not since the London Summit of in April 2009 has protectionism had such a high profile in the run-up to a G20 Leader’s Summit. President Trump’s America First policies have drawn sharp criticism from leaders of other G20 governments. Accusations and counter-accusations of unfair trading practices have become a regular occurrence. So as to shed light on competing claims, this Global Trade Alert report documents the actions taken by G20 governments through to the end of June 2017.
The principal findings of this report are:
- Compared to 2016, US commercial policy this year became more protectionist and markedly less liberalising. Meanwhile, the rest of the G20 resorted less to protectionism. Has President Trump’s bluster accomplished what the G20 pledge failed—namely, to curb protectionism?
- Such is the failure of the G20 pledge that by the end of 2016 a total of 2,420 protectionist measures were still in effect that harm US commercial interests. Put simply, if the US administration is looking for evidence to bash trading partners, they will find it.
- The G20 members that reduced their hits to US commercial interests the most this year were those that had harmed the US more often in the years before President Trump was elected.
- Those who worry only about across-the-board US tariff increases fail to realise that US imports are concentrated in so few product categories that a series of sectoral measures could substantially reduce trade. Bear this in mind as the US targets unfair trade practices at the sectoral level.
- Import restrictions are far less important trade distortions for most G20 governments than those created by state largesse given to farmers and manufacturers and by fiscal incentives for exporters that seek to gain market share from trading partners in overseas markets. Expect more clashes between G20 members over subsidies rather than import restrictions.
For far too long the G20 has maintained a diplomatic fiction that crisis-era protectionism was tamed. Now that a US president has been elected that is clearly dissatisfied with the status quo, there is a real risk that the accumulation of G20 beggar-thy-neighbour acts will be used to justify all manner of US protectionism. If that happens, diplomatic chickens will have come home to roost.
Release date: 3 July 2017