Surviving the fierce trade winds of 2024

Welcome to the last trade secret of 2024. Today I’m looking back at the events of the past year through what I wrote about it at the time. In summary, geopolitical tensions threaten to knock globalization off course, but evidence of the resilience of the global trading system is growing every year. Charted Waters considers the outlook for the European economy. One week from now, on January 6th, we’ll send you our first newsletter of 2025. Until then, Happy New Year to everyone.

price rise, price fall

close down suez

The year began with the latest threat to the global trading system in the form of the Houthi blockade of the Suez Canal. I’m optimistic that the global economy and trading system will weather this shock well, and I hedged my predictions a bit in January 8th’s “Why the Red Sea Attack Won’t Derail Globalization (Maybe)” , “Red Sea Attack” further expanded on that prediction. “Ink Flows from the Red Sea Attack” (January 15)

However, this incident has highlighted one of these long-term threats. In his January 18 article, “The World Cannot Depend on America to Keep the Trade Peace,” he argued that U.S. foreign policy is only intermittently aligned with commercial interests.

Policy makers fall into inaction.

In “The Case for the WTO,” I tried to be bravely optimistic about the WTO as a negotiating body ahead of a ministerial meeting in Abu Dhabi in late February. Sadly, ministers were unable to generate much agreement on how to combine environmental protection and trade policy (see “Weakening the WTO will do more damage to the planet than harm free trade” on 4 March). However, there were not many policy decisions made this year either.

The usual suspicions between the usual suspects

By the way, as I pointed out on March 11th in “Theatrical Confrontation Over Tariffs Concerning Biden’s Chances of Reelection,” it is clear that the United States and China will become closer in some way in the run-up to the U.S. presidential election. Impossible. And the Biden administration’s insistence that allies sacrifice their own principles for obsession with the U.S. steel industry (“Let’s lie down and think of Pennsylvania” on March 18) also adds to tensions with the E.U. ensured the continuation of

Despite the administration’s pretense of being internationalist in April 22nd’s “Biden tries to reset White House on climate and trade,” I agree with May 13th’s “Biden tries to reset White House on climate and trade.” “Sneaking Behind a Tariff Wall” said the U.S. green transition plan is essentially inward-looking. .

The dispute between Brussels and Beijing

Let me tell you, as I argued on May 7th in “Xi’s visit stress-tests Macron’s plans for a sovereign Europe,” just because the EU doesn’t get along well with the US , did not necessarily mean that Brussels was all on Beijing’s side. The newsletter was notable for containing my most wince-inducing headline pun of the year: “Xi loves the EU, yes, yes, yes.” very sorry. I argued in “Beijing Strikes Back at Washington and Brussels” on June 3 that the EU’s anti-subsidy tariffs on China’s EVs created a predictable threat, but this would not open up trade across the board. He also emphasized that this was an attempt to frame negotiations, rather than a “EU bets on diplomatic approach with China electric vehicles” war on June 17th.

The EU will go it alone on green trade

In the absence of international agreements on climate change and trade, Brussels pushed ahead with unilateral measures on carbon border tariffs and deforestation. As for how these have caused a lot of frustration among trading partners, I’ve written about 18 July’s “Why Brussels can’t see deforestation instead of trees” and 29 July about “E.U. “It’s not beautiful to be small, even though we’re paying carbon tariffs.”

Bright clouds that betray a dark inner layer

Despite the diplomatic standoff, actual trade is generally going well. On August 29th, I wrote in “Open Trade Saved Us from a Global Food Crisis” that one of the world’s largest grain exporters (Russia) invaded another country (Ukraine). He then mentioned another catastrophe that did not occur despite explicit threats to internationalize. Hunger is a geopolitical weapon.

Similarly, the explosion in global inflation following the end of COVID-19 lockdowns and the invasion of Ukraine did not cause serious damage to the global economy, as monetary policymakers wisely did not overreact. It was beginning to subside (“Part of the stagflation of the polycrisis stubbornly failed to materialize”, September 23). And who better to take credit for the overall health of world trade than central bankers? This is a company that actually operates. On September 26th, I looked at how flat-pack furniture giant IKEA has been able to stay in business in an article titled “How supply chain superheroes have kept global trade flowing.” I saw it.

And then Trump appears

The last two months have been all about Trump. My article is the thesis (we’ll hear more about this next year) that the main thing about his trade policy is not so much its radicalism as the disruption it will achieve. unified by. They are overconfident about how much influence tariffs have on other countries. Therefore, on October 31st, we considered the “internal conflict that determines President Trump’s trade policy.” On November 7, shortly after the election, I discussed the damage it would do to the United States if Trump really tried to close the deficit with tariffs in “Trump’s Tariff Obsession Is Worse Than Before” and 12 On the 5th of May, we discussed “How the superpower of tariff man will deal with it”. He’s weaker than he thinks. ”

christmas cheer

As someone who is fundamentally optimistic (about trade, if not trade policy decisions), my last shot of the year on December 19th was “We have been given the great gift of open trade,” and in 2024 may not have worked out, but he talked about all the things that went wrong. t.

Sea areas with nautical charts

Leaving aside the debt crisis in the euro area, the economies of major European countries have not necessarily been doing well in recent decades, and it is likely that things will worsen further in the future.

trade links

The FT’s Gideon Lachman examines how the United States has become a radically revisionist state bent on upending the international order.

A new paper on geopolitics and trade by Aaditya Mattoo of the World Bank, Michele Ruta of the IMF, and Robert W. Steiger of Dartmouth College.

A Bloomberg article considers how small-scale “minilateral” agreements on the environment can make up for the lack of progress from larger agreements such as the COP and the Convention on Plastics Production.

The FT examines how the rapid appreciation of the Argentine peso, which has appreciated more in real terms than any other widely traded currency this year, is putting pressure on the economy.

Trade Secrets is currently edited by Georgina Quach.