Economics News

"What happens Friday will 'represent a fundamental retreat by the leader of the global trading system'," says Mary Lovely, professor of economics, adding, "It will be seen as a turning point."

"More firms will follow Harley’s lead and move production overseas," says Mary Lovely, professor of economics. "Can’t blame them. Many companies are being put in very difficult positions." 

"While good ideas to deal with them exist both within and outside the government, implementation is key. This is where the government often does not perform well," writes Devashish Mitra, professor of economics and Gerald B. and Daphna Cramer Professor of Global Affairs.

"We’ve never seen anything like this," Mary Lovely told the Associated Press. Lovely recently spoke with multiple news outlets about the trade war between the U.S. and China.  

"Tariffs on the imports of steel will make steel more expensive here, thereby raising the cost of production in steel-using industries and making them less profitable," says Devashish Mitra, professor of economics and Gerald B. and Daphna Cramer Professor of Global Affairs. "These steel-using industries will then cut employment."

"Yes, we are now in a trade war," says Professor of Economics Mary Lovely. "The two sides are no longer engaged in productive talks to defuse tensions," she adds.

"Unless there’s congressional intervention, it’s hard to see where this goes," says Mary Lovely, professor emeritus of economics at the Maxwell School, about President Trump's combative trade stance.

"This divide-and-conquer strategy is not entirely unexpected, especially now that the three-way negotiating process seems to have hit a wall," says Mary Lovely, professor of economics, on President Trump's NAFTA talks.

These new tariffs will “almost surely not” cause a recession, says Mary Lovely, professor of economics. “This industry is important but it’s not that important. Costs will rise. We’ll see some job dislocation…but we will not see a recession,” she adds.

Gary Engelhardt, professor of economics, and his co-authors found that the introduction of the early retirement option lowered the average age of those claiming Social Security by about a year and a half and lowered Social Security income by an average of 1.5 percent for male-headed retired households.

U.S. tariffs will “drive up costs for U.S.-based manufacturers and disadvantage American workers competing in global markets,” due to the additional costs they will inject into the supply chain, according to Mary Lovely, professor of economics.

"We've come to expect this type of ebb and flow in terms of the threat of levying trade protections against our trading partners from this administration," says Mary Lovely, professor of economics.

"They failed to drill down on the biggest frictions facing U.S. businesses and on those where we are most able to move the Chinese," Mary Lovely, professor of economics, says of the vague statement the U.S. and China released regarding the trade conflict.

"The proposed tariffs will hit bilateral trade in fast-growing, knowledge-based sectors the hardest," say Mary Lovely, professor of economics, and Yang Liang, a Ph.D. candidate in economics. "Rather than hitting the administration’s intended target—Chinese firms that may have unfairly obtained American technology—the proposed tariffs would actually inflict damage on U.S. high-technology sectors."

"These have morphed into levers, cudgels, whatever you want to call them," says Mary Lovely, professor of economics, about the Trump administration’s trade threats. "We’ll see what’s left in the end."