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Daniel Griswold

Daniel Griswold

Articles by Daniel Griswold

A Progressive Economist Makes the Case for Free Trade and Immigration

February 21, 2020

With her new book, Open: The Progressive Case for Free Trade, Immigration, and Global Capital, Reed College economics professor Kimberly Clausing has planted her flag in what has become sparsely inhabited political territory. She’s a progressive who embraces free trade and globalization.
Some on the American left today have made common cause with more Trumpian conservatives, blaming trade, outsourcing, and immigration for the woes of American workers. But not Clausing. While displaying her progressive credentials on other issues, she offers a cogent, accessible, and compelling case for a more open US economy.
Open is really two books under a single cover. One book is a defense of openness as an economic agenda—openness to imports as well as exports, to immigration, and to international

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America’s Economic “Comeback” Owes No Thanks to Trump Trade Policies

February 5, 2020

In his State of the Union address on Tuesday night, President Trump touted the strong US economy and low unemployment rate, claiming credit for a “great American comeback” driven in significant part by his trade policies. The president was right about the general health of the US economy, but not about the role of his trade policies.
In his address, the president took credit for replacing what he called the “the disastrous NAFTA trade deal” (the 1994 North American Free Trade Agreement, or NAFTA) with the United States-Mexico-Canada Agreement (USMCA), which is expected to go into effect later in 2020. He also highlighted his tariff war against China, claiming that the resulting “phase one” agreement with China will protect US workers and intellectual property.
The economic impacts of both

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US Treasury’s Currency Report on China is a Case Study in Political Manipulation

January 14, 2020

The US Treasury’s semi-annual report issued this week on the exchange rate policies of China and other major trading partners is an exercise in intellectual gymnastics. The report reiterates that China was indeed a currency manipulator, as Treasury declared in August 2019, but then states it has magically ceased to be one now that the two nations are ready to sign the “Phase One” trade deal this week in Washington.
In fact, under any reasonable reading of US law, China has refrained from manipulating its currency for the past decade or more. The administration’s declaration over the summer was more a negotiating tactic designed to pressure China to sign a trade agreement, and its reversal of that finding in the latest currency report is not based on any real change in evidence.
What this

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Trump’s “Phase 1” Deal with China Promotes US Exports in the Wrong Way

December 17, 2019

A novel feature of the Trump administration’s “Phase 1” trade deal with China announced last Friday is that it would require China to increase its purchase of US goods and services by a total of $200 billion in the next two years. It’s a demand that, even if met, won’t accomplish President Donald Trump’s China-trade goals of promoting US exports and liberalizing the Chinese economy.
According to an accompanying factsheet published by the Office of the US Trade Representative, the agreement “includes commitments from China to import various U.S. goods and services over the next two years in a total amount that exceeds China’s annual level of imports for those goods and services in 2017 by no less than $200 billion.” In other words, China has agreed to purchase at least $200 billion more in

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Trump’s Trade Policy Has Produced Damaging Tariffs but Little Else

December 3, 2019

Americans are about to enter the third full year of President Donald Trump’s aggressive tariff regime, which aims to promote US manufacturing, protect key industries, and prompt other nations to reduce their trade barriers. So, it’s a good time to stop and ask whether tariffs are producing the results desired by the president and other supporters of his trade policies.
It’s an important question for America’s economic future as well as for the president’s reelection chances. But with ongoing trade talks with China and other countries producing little real progress and the recently negotiated US, Mexico, Canada Agreement (USMCA) to replace NAFTA stalled in Congress, the best that can be said for the president’s trade agenda is that it is a work in progress. The more sober reality is that

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Higher Tariffs Benefit Certain CEOs, But Almost Nobody Else

November 8, 2019

A big reason why tariffs are so tempting to politicians is that the costs they impose on the economy are diffused. These costs are spread across millions of households and thousands of businesses, forcing them to pay higher prices for the protected good, while the benefits are concentrated among the small but well-organized sectors that gain from restrictions on foreign competition.
According to a new Mercatus Center study, the chief executive officers of the companies that directly benefit from tariffs imposed by the US government are among the biggest winners from trade restrictions.
In the study, “Executive Incentives, Import Restrictions, and Competition: Empirical Analysis of Antidumping and Countervailing Duty Orders,” Professor Brian Blank at the College of Business at Mississippi

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UK Election Could Open Door for an Ambitious US-UK Trade Agreement

October 31, 2019

The British Parliament voted this week to hold a national election on December 12. If the Conservative Party holds on to its lead in the polls, the results could deliver an early Christmas present for those who support “Brexit” and a potential US-UK trade agreement.
The dominant issue of the election will be whether the UK will finally exit the European Union (EU), as voters narrowly directed in a 2016 referendum, or whether so-called Brexit will be delayed once again or even scuttled altogether. The UK’s Prime Minister Boris Johnson has pledged that if his Conservative Party wins a majority, he will withdraw the UK from the EU by January 31, 2020—the latest extension date granted by the EU.
If Brexit finally happens, it will open the opportunity for the US and the UK to negotiate a

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US Trade Proves Resilient Despite President Trump’s Escalating Tariff War

October 4, 2019

Americans continue to trade robustly with the rest of the world, according to this morning’s monthly report from the U.S. Commerce Department. The escalating tariffs imposed by the Trump administration have put a big dent in U.S. trade with China, but that has only diverted trade elsewhere, and meanwhile Americans continue to pay a mounting tariff bill to the federal government.
One of the big reality checks for the Trump administration in the report on trade through August is that the US trade deficit is stubbornly resistant to modification by tariffs. When President Trump took office, one of his biggest economic goals was to reduce and eliminate the US trade deficit with the rest of the world, starting with the huge bilateral deficit with China.
The trade report certainly confirms that

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Boris Johnson's Ascent to PM Brings Brexit, US-UK Trade Deal Closer to Reality

July 26, 2019

With his tousled hair, populist flair, and the blessing of the queen, Boris Johnson moved into 10 Downing Street this week as the United Kingdom’s new prime minister. His ascent, besides providing more colorful images for TV, will bring both Brexit and a future US-UK free trade agreement closer to reality.
Johnson has championed Brexit, the UK’s exit from the European Union that was approved narrowly by British voters in a referendum in June 2016. Johnson has committed his government to leave the EU by the October 31 deadline, even if it means “crashing out” without an agreement with the EU on exit terms.
Putting aside the short-term consequences of a hard Brexit, the UK’s exit from the EU’s customs union will free the UK government to sign its own trade agreements with other nations,

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Reform and Expand the US Visa System for High-Skilled Workers

May 22, 2019

Thank you, Chairwoman Velázquez, Ranking Member Chabot, and members of the committee for the opportunity to talk about the urgent need to reform the US visa system to better serve our nation in the 21st century. I’m a senior research fellow and codirector of the Trade and Immigration Project at the Mercatus Center at George Mason University. The Mercatus Center is the world’s premier university source for market-oriented ideas—bridging the gap between academic ideas and real-world problems.
Today, I would like to suggest the following three takeaways:
The H-1B visa program and the high-skilled immigration it facilitates are key to the prosperity of the US economy, including the healthcare sector.
Small businesses as well as large businesses have a stake in a more modern, streamlined, and

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Assessing President Trump’s Trade Priorities

March 20, 2019

President Trump has delivered on his promise to shake up Washington, arguably nowhere more so than in the policy space of international trade. President Trump’s trade agenda has challenged more than seven decades of bipartisan policy commitment to seeking lower trade barriers at home and abroad through negotiated agreements.
While President Trump pays lip service to pursuing free trade and eliminating tariffs, his trade policies so far have been marked by higher U.S. duties on a range of products, from washing machines to steel. Under Section 301 of the Trade Act of 1974, the administration has imposed duties on $250 billion of imports from China, with those duties set to escalate in 2019 absent an agreement with China. And under Section 232 of the Trade Expansion Act of 1962, the

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Mirror, Mirror, on the Wall

January 24, 2019

Recent suggestions for higher “reciprocal” tariffs on goods entering the United States imported from countries that impose higher tariffs than the United States would be an economic and administrative nightmare—and a policy mistake of historic proportions. So argues Daniel Griswold in “Mirror, Mirror, on the Wall: The Danger of Imposing ‘Reciprocal’ Tariff Rates.”
The United States presently applies tariffs on a nondiscriminatory “unconditional most-favored nation” (MFN) basis (this is also consistent with our international treaty obligations). The guiding principle of unconditional MFN is equality: another nation’s duty rates are internal matters as long as they are applied equally to similar products from all other nations. This has been the foundation of US trade policy and the

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Strengthening the US Economy through a US-UK Trade Agreement

January 9, 2019

Thank you for the opportunity to offer comments for the January 29, 2018, hearing held by the Office of United States Trade Representative on negotiating objectives for a potential US-UK trade agreement. The Mercatus Center at George Mason University is dedicated to bridging the gap between academic ideas and real-world problems and to advancing knowledge about market-based policies that advance the freedom and well-being of the American people.
At a historic meeting at Chequers, England, in July 2018, President Donald Trump and Prime Minister Theresa May agreed to pursue an ambitious US-UK trade agreement if and when the United Kingdom leaves the European Union. For the people of the United States, such an agreement would deepen our commercial ties to a longtime ally and the world’s

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Why Trump’s Threat to Withdraw from NAFTA Would Be the True Disaster

December 4, 2018

Aboard Air Force One on his way back from the G-20 summit in Buenos Aires this weekend, President Trump renewed his threat to withdraw the United States from the almost 25-year-old North American Free Trade Agreement with Canada and Mexico. It’s a threat the president would be wise to reconsider.
President Trump has long been a critic of NAFTA. This fall his administration succeeded in renegotiating the agreement with Canada and Mexico, and last week he signed the re-named “US-Mexico-Canada Agreement” (USMCA) with his counterparts at the beginning of the G-20 meeting.
In an effort to prod Congress to approve the revised agreement, President Trump told reporters, “I will be formally terminating NAFTA shortly. …We (will) get rid of NAFTA. It’s been a disaster for the United States.” When

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Trump vs Obama: The Economic Tale of the Tape

October 29, 2018

As we approach the November elections, President Trump has been touting the strong economy as one of his major accomplishments. In a recent speech at a steel plant in Illinois, the president said, “We’re having the best economy we’ve ever had in the history of our country.” 
Just how good is the U.S. economy compared to what the president inherited in January 2017, and how much credit do he and the GOP Congress deserve for it? The answer is mixed: The economy has indeed improved under the president’s watch, but not spectacularly so, and the credit due to Washington is modest…
Continue reading: Trump vs Obama: The Economic Tale of the Tape

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“Revised” US-Korea Trade Agreement a Small Step Backwards, but Better Than No Agreement

October 2, 2018

Somewhat lost among all the front-page news last week was President Trump’s meeting with the president of South Korea in New York to sign a revised version of the US-Korea Free Trade Agreement.
President Trump hailed the changes as representing an entirely new agreement to replace the 2012 pact that he had denounced earlier in his presidency as “a horrible deal” that was destroying America. In fact, according to Bob Woodward’s new book on the Trump presidency, Fear, the president was ready in April 2017 to sign a letter withdrawing the United States from the agreement, but aides managed to quietly snatch it from his desk.
The changes the Trump administration negotiated with South Korea are not major and certainly do not represent anything like a new agreement. Nor are the changes a net

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NAFTA Needs a Tune-Up, Not a Major Overhaul

September 17, 2018

As talks resume with Canada this week over revising the North American Free Trade Agreement (NAFTA), President Trump is threatening to terminate the accord if our northern neighbor refuses to agree to U.S. terms, including the scrapping of its protectionist dairy program. While the almost 25-year-old agreement is due for a tune up, ending it with Canada would be a huge mistake.
Negotiations so far have yielded mixed results. In bilateral talks, the United States and Mexico agreed to add a chapter enhancing digital trade, and for Mexico to raise its “de minimis threshold” exempting small shipments from customs inspections and duties to $100. Other rule changes would protect intellectual property and reduce non-tariff barriers against agricultural trade…
Continue reading: NAFTA Needs a

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