Trade

Prof. David Autor joins Danielle Pletka and Marc Thiessen of the American Enterprise Institute to discuss his research examining the impact of China entering the World Trade Organization, how the U.S. can protect vital industries from unfair trade practices, and the potential impacts of AI. “If you say, we're running a race against China, and certainly we are in many ways, we have two tools at our disposal. One is we can try to trip them up and hobble them. The other is we could bulk up and run faster. And we're going to have to do both,” says Autor. “We have to be willing to do the expensive stuff as well as the cheap stuff. The cheap stuff is like, let's put tariffs on them. The expensive stuff is let's invest in ourselves. And those are complementary activities.”

Prof. Christopher Knittel speaks with GBH reporter Robert Goulston about the potential impact of tariffs on imported metals and lumber. “When you place a tariff on an imported good, it’s not just the price of the imports that increase, but it’s also the price of the domestically manufactured products that increase,” explains Knittel. “Obviously the cost of importing steel and aluminum will increase, but domestic manufacturers will also raise their price because they can.”

Prof. David Autor speaks with NPR Planet Money host Greg Rosalsky about his working paper exploring “what happened to American communities after China joined the World Trade Organization in 2001,” also known as the “China Shock." Autor and his colleagues found that while regions impacted by the China Shock did eventually recover, the people hurt by the China Shock did not. “The China Shock research suggests that classic, free market economic theory blinded many to the reality that free trade can destroy the livelihoods of many people and that they have a hard time adjusting," says Rosalsky.

Prof. Yossi Sheffi, director of the MIT Center for Transportation and Logistics, discusses the potential impacts of the collapse of the Francis Scott Key Bridge in Baltimore on shipping, logistics and the economy. “Many other ports are not equipped to handle the type of commodities that go to Baltimore,” Sheffi explains.

Prof. Yossi Sheffi, director of the MIT Center for Transportation and Logistics, speaks with WCVB-TV about how the collapse of the Francis Scott Key Bridge in Baltimore and the closing of the Port of Baltimore could impact car shipments on the East Coast. Sheffi explains that not all ports can handle cars like Baltimore, and they require “hundreds of trucks and railcars that are equipped to transport vehicles and bring them to the dealers.”

Prof. David Autor speaks with Wall Street Journal reporter Jason Douglas about how there may be another “China shock” due to the influx of goods manufactured in China being made available in foreign markets. “It won’t be the same China shock,” says Autor, adding that “the concerns are more fundamental” as China is competing with advanced economies in cars, computer chips and complex machinery.

Prof. Daron Acemoglu and Prof. Simon Johnson write for Project Syndicate about how to structure U.S. international trade policies so that they benefit American workers and global stability. “Two new principles can form the basis of U.S. policy. First, international trade should be structured in a way to encourage a stable world order,” they write. “Second, appealing to abstract 'gains of trade' is no longer enough. American workers need to see the benefits. Any trade arrangement that significantly undermines the quality and quantity of middle-class American jobs is bad for the country and its people, and will likely incite a political backlash.”

Prof. David Autor and his colleagues have documented China’s impact on manufacturing jobs in the U.S. after joining the World Trade Organization in 2001, an effect known as the China shock, reports Shawn Donnan for Bloomberg in an article about how manufacturing job losses impacted Rockingham County in North Carolina. “Declining populations of young workers, as well as lower pay, have persisted in Rockingham and other communities hardest hit by this China shock, the researchers found in a 2021 paper,” writes Donnan.

Profs. Daron Acemoglu and David Autor speak with New York Times correspondent Thomas B. Edsall about the forces driving working-class voters towards the Republican party. “Elites are making choices that are not good news for non-college workers,” said Acemoglu. “In fact, they are bad news for most workers.” 

Prof. Jonathan Gruber speaks with Boston Public Radio about the economics of sanctions and whether they have been an effective tool to deter Russia's invasion of Ukraine. “The integrated world economy has made these sanctions so much more powerful,” says Gruber. “The real test is will they eventually work to bring [Putin] to heel over the longer run.”

Prof. David Autor, Harvard University Prof. Gordon Hanson, University of Zurich Prof. David Dorn, and Monsah University Prof. Kaveh Majlesi have described an “ideological realignment in trade-exposed local labor markets that commences prior to the divisive 2016 U.S. presidential election,” reports Thomas B. Edsall for The New York Times.

Bloomberg Businessweek reporter Shawn Donnan spotlights Prof. David Autor’s series of research papers examining the impact of the surge of Chinese imports on the overall American economy and specific regions of the country. Autor and his colleagues make the case that “well-funded, targeted government policies could have helped prevent the economic blight that engulfed many affected communities.”

Nigerian economist Ngozi Okonjo-Iweala MCP ’78, PhD ’81 has been selected to lead the WTO, writes David McHugh for the AP. “Her first priority would be quickly addressing the economic and health consequences of the COVID-19 pandemic, such as by lifting export restrictions on supplies and vaccines and encouraging the manufacturing of vaccines in more countries,” writes McHugh.

New York Times reporter Ana Swanson highlights how MIT alumna Ngozi Okonjo-Iweala MCP ’78, PhD ’81 has been named the new director-general of the WTO. Okonjo-Iweala will be the first woman and first African to lead the WTO. “It’s been a long and tough road, full of uncertainty, but now it’s the dawn of a new day and the real work can begin,” she said.

TIME reporter Justin Worland writes about the selection of Ngozi Okonjo-Iweala MCP ’78, PhD ’81, an MIT graduate and the former finance minister of Nigeria, as the new director-general of the WTO. Okono-Iweala believe that “global trade can help ease the COVID-19 pandemic, tackle climate change and restore faith in the system of cooperation that has faltered in recent years,” writes Worland.