April 21, 2021
Menaldo & Wittstock’s new working paper
Victor Menaldo and Nicolas Wittstock wrote and posted a new working paper:
A hefty dose of nationalism infuses Build Back Better, U.S. President Joe Biden’s economic policy priorities. Echoing Trump’s Make America Great Again promises, it embraces a zero-sum logic regarding economic relations with China, and is centered on trade protectionism, restrictions on capital and technological flows, and an industrial strategy that subsidizes American suppliers. Why? Many American politicians, if not average citizens, claim that China benefits much more than the U.S. from their economic interdependence. We debunk this idea, rejecting the logic of the arguments that policymakers deploy to justify their economic nationalism. American businesses, consumers, and workers benefit from Sino-U.S. interdependence. Plus, many of Trump’s supporters backed him not because of his protectionism, but despite it. We also discuss concerns over relative versus absolute gains in Sino-U.S. economic relations. China’s increased economic convergence with the U.S. may help explain America’s neo-mercantilism, especially in light of stagnating median wages.
