Mercantilism

4603233119_ca4b18e3ef_o2

New Government Report Confirms Benefits of Digital Trade

The digital economy has been a major boon to U.S. domestic and international trade, as is documented by a new report by the United States International Trade Commission entitled Digital Trade in the U.S. and Global Economies (summary here). And even though the report shows important benefits from digital trade, those benefits are likely understated. This is because the report limited its analysis to “digitally intensive” sectors, which means that its numbers exclude contributions from firms that only use digital trade as a smaller part of their business.

Still, digital trade has made quite an impact: the report estimates that digital trade has raised real U.S. GDP by $517.1-$710.7 billion (3.4−4.8 percent) by increasing productivity and lowering the costs of trade. By raising GDP, digital trade increased average wages, and the increased wages likely contributed to increased employment by as much as 2.4 million jobs.

Within digitally intensive industries (and likely within many non-digitally intensive industries, although the report focused on the former), the internet has come to play a major role in everyday commerce. Firms in these industries sell nearly a trillion dollars’ worth of goods and services … Read the rest

800px-Barack_Obama_and_Hu_Jintao_participate_in_an_official_arrival_ceremony_the_Great_Hall_of_the_People

The Fight Against Chinese Green Mercantilism Continues

Last month, the United States International Trade Commission voted to uphold tariffs on solar panels imported from China. The Commerce Department had imposed the tariffs earlier this year in response to China’s heavy subsidization of domestic solar PV manufacturers. However, while the move is welcome, it is important to recognize that is not a magic fix and the fight against Chinese green mercantilism continues.

To be sure, the tariffs are well-justified, as they can simultaneously help level the playing field, discourage China from employing unfair trade practices, and encourage clean energy innovation. But they may be too little, too late. Since the tariffs apply solely to panels made of Chinese-produced solar cells, Chinese companies can avoid them by assembling panels with cells produced elsewhere. ITIF Senior Analyst Matthew Stepp details the result at Forbes:

By shifting its way through loopholes in the tariff ruling, China is rerouting its manufacturing … Read the rest