In the News: Mary E. Lovely

"I do think we can see a strategy, but that doesn’t mean it’s a good strategy,” says Mary Lovely, professor of economics. "They’re going to use these bilateral deals to strong-arm countries into lining up behind the U.S. on China. But when we get there, what’s the next step? I don’t know what the endgame is."

"Unfortunately, I believe it may do little to expand employment in the auto sector and will hurt auto buyers," says Mary Lovely, professor of economics. "The new rules raise the cost of production in North America, raise prices for auto buyers, and reduce overall auto and truck sales."

Mary Lovely, professor of economics, says the new U.S. trade deal with Canada is a "clear signal" that the U.S. is "circling the wagons against China."

"They are trying to threaten the Canadians into signing a deal that at this point the Canadians don’t want to sign and there is a gigantic bogeyman in the room which is the 25 percent tariff on Canadian auto imports," says Mary Lovely, professor of economics.

According to Mary Lovely, professor of economics, most of the tariffs that have been imposed have hit U.S. companies, not the Chinese.

"The first few rounds of tariffs hit supply chains really hard," says Mary Lovely, professor of economics. Now, the Trump administration "has begun to hit things clearly not processed in the U.S.—consumer goods—and this is going to get people’s attention."

"Trade policy has very little direct impact on the overall trade deficit in the longer run," said Mary Lovely, professor of economics.

The fellowship is made possible by generous gifts to the Astrid Merget Fund honoring two-time alumna and former associate dean of the Maxwell School Astrid Merget ’68 M.P.A./’73 Ph.D. (SSc).

"What this deal really is signaling is that this administration is going to go forward with a 25% tariff on autos," says Mary Lovely, professor of economics. "That's going to greatly upset our partners in the EU, in Japan."

Professor of Economics Mary Lovely says negotiators should seek specific policy changes that will address the reason for these tariffs in the first place—U.S. allegations that China treats American firms unfairly with respect to their technology and intellectual property.

"The companies that use steel, like aluminum can manufacturers, or companies that make steel vats for pharmaceuticals or the dairy industry, they're going to be hurt by this," says Mary Lovely, professor of economics.

"If jobs and wealth are the metric for 'winning the trade war,' China, not America, will emerge the victor," says Mary Lovely, professor of economics.

"The Chinese are not going to be buying our soybeans, so almost by musical chairs our soybeans are going to Europe,” Mary Lovely, professor of economics, says about the EU's response to China's tariffs on American soybeans. 

Mary Lovely, professor of economics, says that after two rounds of retaliatory tariffs by China, U.S. ham and various other pork products now face massive tariffs—between 62 and 70 percent. "In recent weeks, the U.S. Department of Agriculture has reported zero weekly export sales of pork to China," she says. "So our exports to the country have pretty much collapsed."

Mary Lovely, professor of economics, explains why lower-income consumers, who tend to buy more goods from countries such as China, might end up feeling squeezed more than their higher-income counterparts.

"The biggest price hikes may be seen among these lower-priced products, and the effect of that will hit people toward the lower end of the income distribution more," says Professor of Economics Mary Lovely.

"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."

"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.  

"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.