Issue US trade policy, tariffs and the geopoliticisation of markets

Summary

The report finds that US trade policy and a more structural assault on the liberal world order have created great uncertainty for world trade. In the short run an upswing in the business cycle seems to limit the trade effects, but the longer-term impact of higher American consumer prices on the world economy is less certain. As tariffs are introduced, reintroduced or threatened, world markets become less liberal and more geopolitical. Trade tensions and export controls multiply, and economic instruments are increasingly deployed for security ends. The report expects economic disputes to be pulled ever more often into the geopolitical arena and EU trade policy to be used more intensively as a geopolitical instrument.