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FROM PROTECTIONISM TO TRADE WARS: THEIR EFFECTS OBSERVED THROUGH FINANCIAL MARKETS

Year 2020, Volume: 18 Issue: 1, 1 - 19, 01.03.2020

Derya Yılmaz

https://doi.org/10.11611/yead.606693

Abstract

Even the outcomes of free trade are well known and accepted widely in economic literature, protectionism has never totally lost its ground. Today, the protectionist trade policies of the US are transformed into a trade war. The costs accrued by the outcomes of a trade war would be extensive. These costs have been materialized via 2018 tariff hikes to a certain extent but the remaining impacts–in case of an escalated trade war- could be excessive. The trade war would also lead to certain consequences via financial markets. The present study aimed to analyze how protectionism evolved into a trade war and its ample effects that would be observed through financial markets. The study demonstrated that global uncertainty would scale up as a result of trade conflicts between nations. The rising global uncertainty would have remarkable consequences for both developed and developing countries via financial markets. 

Keywords

Protectionism Trade War Tariffs Uncertainty Financial Markets

References

  • Amiti, M., Redding, S. and Weinstein, D. (2019), “The Impact of the 2018 Trade War on U.S. Prices and Welfare”. CEPR Discussion Paper. 13564.
  • Autor, D. H & Dorn, D. & Majlesi, K. & Hanson, G. H. (2017), “Importing Political Polarization, The Electoral Consequences of Rising Trade Exposure, NBER Working Paper, 22637.
  • Babacan, M. (2018), “Amerika’da Asya Dramı: Yeni Korumacılık ve Ticaret Savaşları”, Çerçeve Dergisi, 86, 38-47.
  • Bagwell, K. & Staiger, R.W. (2013), “Can the Doha Round Be a Development Round? Setting a Place at the Table”, NBER Chapters, in: Globalization in an Age of Crisis: Multilateral Economic Cooperation in the Twenty-First Century, 91-124.
  • Bairoch, P. (1972) “Free Trade and European Economic Development in the 19th Century”, European Economic Review, 3: 211–245.
  • Baldwin, R. (2016), The Great Convergence: The Information Technology and the New Globalization, Harvard University Press.
  • Baldwin, R. (2018), “Trump can’t Fix 21st Century’s Problem with 20th Century’s Thinking” Vox CPER Portal, https://voxeu.org/content/trump-can-t-fix-21st-century-problem-20th-century-thinking (10/03/2019).
  • Berthou, A. & Jardet, D. S. & Szczerbowicz, U. (2018), “Costs and consequences of a trade war: a structural analysis”, Rue de la Banque, 72.
  • Blanchard, E.J. (2019), “Trade Wars in the GVC Era”, in Trade War: The Clash of Economic Systems Threatening Global Prosperity, VoxEU Book, https://voxeu.org/content/trade-war-clash-economic-systems-threatening-global-prosperity, 57-64.
  • Bown, C. P. (2019), “The 2018 US-China Trade Conflict after 40 Years of Special Protection”, Peterson Institute of International Economics (PIIE), Working Paper, 19-7.
  • Carstens, A. (2018), “Global Market Structures and High Price of Protectionism”, BIS Speech, Bank of Kansas City’s 42nd Economic Policy Symposium, Jackson Hole, Wyoming, 25/08/2018.
  • Crowley, M. (2019), “Introduction”, in Trade War: The Clash of Economic Systems Threatening Global Prosperity, VoxEU Book, https://voxeu.org/content/trade-war-clash-economic-systems-threatening-global-prosperity, 1-10.
  • Devarajan, S. & Go, D.S. & Lakatos, C. & Robinson, S. & Thierfelder, K. (2018), “Trader’s Dilemma: Developing Countries’ Response to Trade Disputes”, World Bank Policy Research Working Paper 8640.
  • Dizioli, A. G. & van Roye, B. (2018), “The Resurgence of Protectionism: Potential Implications for Global Financial Stability”, in Financial Stability Review, November 2018.
  • ECIPE (2010), “Trade, Global and Emerging Protectionism Since The Crisis”, European Centre for International Economy Working Paper, 02/2010.
  • Eichengreen, B. & Irwin, D. (2010), “The Slide to Protectionism in the Great Depression: Who Succumbed and Why?” Journal of Economic History, 70(04), 871-897.
  • Eichengreen, (2019), “Trade Policy and the Macroeconomy,” IMF Economic Review, Palgrave Macmillan;International Monetary Fund, 67(1), 4-23.
  • Ertürk, E. ve Yılmaz, D. (2018), Uluslararası İktisadi Birleşmeler ve Türkiye’nin İçinde Bulunduğu İktisadi Birleşme Hareketleri (5. Baskı), Bursa: Alfa Aktüel.
  • Fajgelbaum, P.D. & Khandelwal, A. M. (2016), “Measuring the Unequal Gains from Trade”, The Quarterly Journal of Economics, 131(3), 1113–1180.
  • Fajgelbaum,P.D. & Goldberg, P.K. & Kennedy, P.J. & Khandelwal, A.K. (2019), “The Return to Protectionism”, NBER Working Paper, No.25638.
  • Freund, C. & Ferrantino, M.J. & Maliszewksa, M. & Ruta, M. (2018), “Impacts on Global Trade and Income of Current Trade Disputes”, MTI Practice Notes, No:2, World Bank.
  • Furceri, D. & Hannan, S. & Ostry, J. D. & Rose, Andrew K, (2018), “Macroeconomic Consequences of Tariffs” CEPR Discussion Papers, 13389.
  • Galbraith, J. K. (2009), “Büyük Kriz 1929”. çev. Elif Nihan Akbaş, İstanbul: Pegasus Yayınları.
  • Handley, K & Limao, N. (2017), “Policy Uncertainty, Trade, and Welfare: Theory and Evidence for China and the United States”, American Economic Review, 107(9), 2731-83.
  • Handley, K & Limao, N. (2019), “Trade Policy and Uncertainty Aftershocks of Trade Wars and Trade Tensions”, in Trade War: The Clash of Economic Systems Threatening Global Prosperity, VoxEU Book, https://voxeu.org/content/trade-war-clash-economic-systems-threatening-global-prosperity, 95-100.
  • Huang, Y. & Lin, C. & Liu, S. & Tang, H. (2019), “Supply Chain Linkages and Financial Markets: Evaluating The Costs of The US- China Trade War” in Trade War: The Clash of Economic Systems Threatening Global Prosperity, VoxEU Book, https://voxeu.org/content/trade-war-clash-economic-systems-threatening-global-prosperity, 65-72.
  • Johnson, H.G. (1953), “Optimum Tariffs and Retaliation”, Review of Economic Studies, 21(2),41-53.
  • Jordan, T.J. (2018), “Protectionism Complicates Monetary Policy”, Swiss National Bank Speeches, 31 October 2018.
  • Krishna, K. (1989), “Trade Restrictions as Facilitating Practices”, Journal of International Economics, 26(3-4), 251-270.
  • Matoo, A. & Staiger, R. W. (2019), “Trade Wars: What Do They Mean? Why are They Happening Now? What are The Costs?”, NBER Working Paper, 25762. O’Rourke, K. (2000), “Tariffs and Growth in the Late 19th Century”, Economic Journal, 110: 456–483.
  • Ossa, R. (2015), “Why Trade Matters After All”, Journal of International Economics, 97(2), 266-277.
  • Ossa, R. (2019), “The Costs of a Trade War”, in Trade War: The Clash of Economic Systems Threatening Global Prosperity, VoxEU Book, https://voxeu.org/content/trade-war-clash-economic-systems-threatening-global-prosperity, 45-49.
  • Rodrik, D. (2018), “What Do Trade Agreements Really Do?”, Journal of Economic Perspectives. 32(2), 73-90.
  • Rubini, L. (2019), “The Never-Ending Story: The Puzzle of Subsidies”, in Trade War: The Clash of Economic Systems Threatening Global Prosperity, VoxEU Book, https://voxeu.org/content/trade-war-clash-economic-systems-threatening-global-prosperity, 85-93.
  • Rutherford, T. & Bohringer, C. & Balistreri, E. (2018), “Quantifying Disruptive Trade Policies,” Paper presented at Purdue University, GTAP seminar series, August 23, 2018.
  • Sachs, J. (2019), “The Dangerous Absurdity of America’s Trade Wars”, Project Syndicate, https://www.project-syndicate.org/commentary/trump-dangerous-absurd-trade-wars-by-jeffrey-d-sachs-2019-03. (14/03/2019).
  • UNCTAD (2010), International “Trade After the Economic Crisis: Challenges and New Opportunities”, https://unctad.org/en/Docs/ditctab20102_en.pdf . (24/03/2019).
  • WEO (2019), World Economic Outlook Report: Growth Slowdown, Precarious Recovery, April 2019, https://www.imf.org/en/Publications/WEO/Issues/2019/03/28/world-economic-outlook-april-2019, (20/05/2019).
  • Williams, N. (2019), “Resilence od Protectionism” Boston University Law Review, 99, 683-719.
  • Wu, H.X. (2016), “Sustainability of China's Growth Model: A Productivity Perspective”, China & World Economy, 24(5), 42-70.
  • Yalcin, E. & Felbermayr, G. & Steininger, M. (2017), “Global Impact of a Protectionist U.S. Trade Policy”. IFO Papers, 89.
  • Yılmaz, M. & Divani, E. (2018), “Ticaret Savaşları, Ekonomik Milliyetçilik, Yeni Merkantilizm Ve Dünya Ticaret Örgütünün İşlevsizliği”, İzmir Katip Çelebi Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 1(1), 10-24.
  • Zandi, M. & Cochrane, S. & Sweet, R. & Stroppiana, R. & Ell, C. (2018), “US Trade Policy and It’s Impact on Asia”, Asian Managment Insights, 5 (10), 44-52.

KORUMACILIKTAN TİCARET SAVAŞLARINA: FİNANSAL PİYASALAR ÜZERİNDEN ETKİLER

Year 2020, Volume: 18 Issue: 1, 1 - 19, 01.03.2020

Derya Yılmaz

https://doi.org/10.11611/yead.606693

Abstract

Serbest ticaretin üstünlüğü ekonomi yazınında ne kadar kabul edilmiş olsa da korumacılık hiç bir zaman tam olarak ortadan kaybolmamıştır. Bugün ise ABD’nin uyguladığı korumacı ticaret politikası ticaret savaşlarına evrilmiştir. Ticaret savaşlarının maliyeti oldukça fazladır. 2018 boyunca uygulanan tariflerin maliyetleri zaten ortaya çıkmıştır ancak ticaret savaşının derinleşmesi ile birlikte çok daha fazla maliyetin ortaya çıkacağı beklenmektedir. Ticaret savaşının bu maliyetlerinin yanında finansal piyasalar üzerinden maliyetleri de olacaktır. Bu çalışma korumacı ticaret politikasının ticaret savaşlarına nasıl evrildiğini açıkladıktan sonra ticaret savaşının finansal piyasalar üzerinden ne gibi maliyetler yüklediğini analiz etmektedir. Çalışmada ulaşılan sonuçlara göre ticari gerilimler arttıkça belirsizlik artmaktadır. Artan belirsizlik ise finansal piyasalar üzerinden hem gelişmiş hem de gelişmekte olan ülkelere ilave maliyetler yüklemektedir

Keywords

Korumacılık Ticaret Savaşı Tarifeler Belirsizlik Finansal Piyasalar

References

  • Amiti, M., Redding, S. and Weinstein, D. (2019), “The Impact of the 2018 Trade War on U.S. Prices and Welfare”. CEPR Discussion Paper. 13564.
  • Autor, D. H & Dorn, D. & Majlesi, K. & Hanson, G. H. (2017), “Importing Political Polarization, The Electoral Consequences of Rising Trade Exposure, NBER Working Paper, 22637.
  • Babacan, M. (2018), “Amerika’da Asya Dramı: Yeni Korumacılık ve Ticaret Savaşları”, Çerçeve Dergisi, 86, 38-47.
  • Bagwell, K. & Staiger, R.W. (2013), “Can the Doha Round Be a Development Round? Setting a Place at the Table”, NBER Chapters, in: Globalization in an Age of Crisis: Multilateral Economic Cooperation in the Twenty-First Century, 91-124.
  • Bairoch, P. (1972) “Free Trade and European Economic Development in the 19th Century”, European Economic Review, 3: 211–245.
  • Baldwin, R. (2016), The Great Convergence: The Information Technology and the New Globalization, Harvard University Press.
  • Baldwin, R. (2018), “Trump can’t Fix 21st Century’s Problem with 20th Century’s Thinking” Vox CPER Portal, https://voxeu.org/content/trump-can-t-fix-21st-century-problem-20th-century-thinking (10/03/2019).
  • Berthou, A. & Jardet, D. S. & Szczerbowicz, U. (2018), “Costs and consequences of a trade war: a structural analysis”, Rue de la Banque, 72.
  • Blanchard, E.J. (2019), “Trade Wars in the GVC Era”, in Trade War: The Clash of Economic Systems Threatening Global Prosperity, VoxEU Book, https://voxeu.org/content/trade-war-clash-economic-systems-threatening-global-prosperity, 57-64.
  • Bown, C. P. (2019), “The 2018 US-China Trade Conflict after 40 Years of Special Protection”, Peterson Institute of International Economics (PIIE), Working Paper, 19-7.
  • Carstens, A. (2018), “Global Market Structures and High Price of Protectionism”, BIS Speech, Bank of Kansas City’s 42nd Economic Policy Symposium, Jackson Hole, Wyoming, 25/08/2018.
  • Crowley, M. (2019), “Introduction”, in Trade War: The Clash of Economic Systems Threatening Global Prosperity, VoxEU Book, https://voxeu.org/content/trade-war-clash-economic-systems-threatening-global-prosperity, 1-10.
  • Devarajan, S. & Go, D.S. & Lakatos, C. & Robinson, S. & Thierfelder, K. (2018), “Trader’s Dilemma: Developing Countries’ Response to Trade Disputes”, World Bank Policy Research Working Paper 8640.
  • Dizioli, A. G. & van Roye, B. (2018), “The Resurgence of Protectionism: Potential Implications for Global Financial Stability”, in Financial Stability Review, November 2018.
  • ECIPE (2010), “Trade, Global and Emerging Protectionism Since The Crisis”, European Centre for International Economy Working Paper, 02/2010.
  • Eichengreen, B. & Irwin, D. (2010), “The Slide to Protectionism in the Great Depression: Who Succumbed and Why?” Journal of Economic History, 70(04), 871-897.
  • Eichengreen, (2019), “Trade Policy and the Macroeconomy,” IMF Economic Review, Palgrave Macmillan;International Monetary Fund, 67(1), 4-23.
  • Ertürk, E. ve Yılmaz, D. (2018), Uluslararası İktisadi Birleşmeler ve Türkiye’nin İçinde Bulunduğu İktisadi Birleşme Hareketleri (5. Baskı), Bursa: Alfa Aktüel.
  • Fajgelbaum, P.D. & Khandelwal, A. M. (2016), “Measuring the Unequal Gains from Trade”, The Quarterly Journal of Economics, 131(3), 1113–1180.
  • Fajgelbaum,P.D. & Goldberg, P.K. & Kennedy, P.J. & Khandelwal, A.K. (2019), “The Return to Protectionism”, NBER Working Paper, No.25638.
  • Freund, C. & Ferrantino, M.J. & Maliszewksa, M. & Ruta, M. (2018), “Impacts on Global Trade and Income of Current Trade Disputes”, MTI Practice Notes, No:2, World Bank.
  • Furceri, D. & Hannan, S. & Ostry, J. D. & Rose, Andrew K, (2018), “Macroeconomic Consequences of Tariffs” CEPR Discussion Papers, 13389.
  • Galbraith, J. K. (2009), “Büyük Kriz 1929”. çev. Elif Nihan Akbaş, İstanbul: Pegasus Yayınları.
  • Handley, K & Limao, N. (2017), “Policy Uncertainty, Trade, and Welfare: Theory and Evidence for China and the United States”, American Economic Review, 107(9), 2731-83.
  • Handley, K & Limao, N. (2019), “Trade Policy and Uncertainty Aftershocks of Trade Wars and Trade Tensions”, in Trade War: The Clash of Economic Systems Threatening Global Prosperity, VoxEU Book, https://voxeu.org/content/trade-war-clash-economic-systems-threatening-global-prosperity, 95-100.
  • Huang, Y. & Lin, C. & Liu, S. & Tang, H. (2019), “Supply Chain Linkages and Financial Markets: Evaluating The Costs of The US- China Trade War” in Trade War: The Clash of Economic Systems Threatening Global Prosperity, VoxEU Book, https://voxeu.org/content/trade-war-clash-economic-systems-threatening-global-prosperity, 65-72.
  • Johnson, H.G. (1953), “Optimum Tariffs and Retaliation”, Review of Economic Studies, 21(2),41-53.
  • Jordan, T.J. (2018), “Protectionism Complicates Monetary Policy”, Swiss National Bank Speeches, 31 October 2018.
  • Krishna, K. (1989), “Trade Restrictions as Facilitating Practices”, Journal of International Economics, 26(3-4), 251-270.
  • Matoo, A. & Staiger, R. W. (2019), “Trade Wars: What Do They Mean? Why are They Happening Now? What are The Costs?”, NBER Working Paper, 25762. O’Rourke, K. (2000), “Tariffs and Growth in the Late 19th Century”, Economic Journal, 110: 456–483.
  • Ossa, R. (2015), “Why Trade Matters After All”, Journal of International Economics, 97(2), 266-277.
  • Ossa, R. (2019), “The Costs of a Trade War”, in Trade War: The Clash of Economic Systems Threatening Global Prosperity, VoxEU Book, https://voxeu.org/content/trade-war-clash-economic-systems-threatening-global-prosperity, 45-49.
  • Rodrik, D. (2018), “What Do Trade Agreements Really Do?”, Journal of Economic Perspectives. 32(2), 73-90.
  • Rubini, L. (2019), “The Never-Ending Story: The Puzzle of Subsidies”, in Trade War: The Clash of Economic Systems Threatening Global Prosperity, VoxEU Book, https://voxeu.org/content/trade-war-clash-economic-systems-threatening-global-prosperity, 85-93.
  • Rutherford, T. & Bohringer, C. & Balistreri, E. (2018), “Quantifying Disruptive Trade Policies,” Paper presented at Purdue University, GTAP seminar series, August 23, 2018.
  • Sachs, J. (2019), “The Dangerous Absurdity of America’s Trade Wars”, Project Syndicate, https://www.project-syndicate.org/commentary/trump-dangerous-absurd-trade-wars-by-jeffrey-d-sachs-2019-03. (14/03/2019).
  • UNCTAD (2010), International “Trade After the Economic Crisis: Challenges and New Opportunities”, https://unctad.org/en/Docs/ditctab20102_en.pdf . (24/03/2019).
  • WEO (2019), World Economic Outlook Report: Growth Slowdown, Precarious Recovery, April 2019, https://www.imf.org/en/Publications/WEO/Issues/2019/03/28/world-economic-outlook-april-2019, (20/05/2019).
  • Williams, N. (2019), “Resilence od Protectionism” Boston University Law Review, 99, 683-719.
  • Wu, H.X. (2016), “Sustainability of China's Growth Model: A Productivity Perspective”, China & World Economy, 24(5), 42-70.
  • Yalcin, E. & Felbermayr, G. & Steininger, M. (2017), “Global Impact of a Protectionist U.S. Trade Policy”. IFO Papers, 89.
  • Yılmaz, M. & Divani, E. (2018), “Ticaret Savaşları, Ekonomik Milliyetçilik, Yeni Merkantilizm Ve Dünya Ticaret Örgütünün İşlevsizliği”, İzmir Katip Çelebi Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 1(1), 10-24.
  • Zandi, M. & Cochrane, S. & Sweet, R. & Stroppiana, R. & Ell, C. (2018), “US Trade Policy and It’s Impact on Asia”, Asian Managment Insights, 5 (10), 44-52.
There are 43 citations in total.

Details

Primary Language English
Subjects Economics
Journal Section Articles
Authors

Derya Yılmaz This is me 0000-0002-2478-2305

Publication Date March 1, 2020
Published in Issue Year 2020 Volume: 18 Issue: 1

Cite

APA Yılmaz, D. (2020). FROM PROTECTIONISM TO TRADE WARS: THEIR EFFECTS OBSERVED THROUGH FINANCIAL MARKETS. Yönetim Ve Ekonomi Araştırmaları Dergisi, 18(1), 1-19. https://doi.org/10.11611/yead.606693
AMA Yılmaz D. FROM PROTECTIONISM TO TRADE WARS: THEIR EFFECTS OBSERVED THROUGH FINANCIAL MARKETS. Yönetim ve Ekonomi Araştırmaları Dergisi. March 2020;18(1):1-19. doi:10.11611/yead.606693
Chicago Yılmaz, Derya. “FROM PROTECTIONISM TO TRADE WARS: THEIR EFFECTS OBSERVED THROUGH FINANCIAL MARKETS”. Yönetim Ve Ekonomi Araştırmaları Dergisi 18, no. 1 (March 2020): 1-19. https://doi.org/10.11611/yead.606693.
EndNote Yılmaz D (March 1, 2020) FROM PROTECTIONISM TO TRADE WARS: THEIR EFFECTS OBSERVED THROUGH FINANCIAL MARKETS. Yönetim ve Ekonomi Araştırmaları Dergisi 18 1 1–19.
IEEE D. Yılmaz, “FROM PROTECTIONISM TO TRADE WARS: THEIR EFFECTS OBSERVED THROUGH FINANCIAL MARKETS”, Yönetim ve Ekonomi Araştırmaları Dergisi, vol. 18, no. 1, pp. 1–19, 2020, doi: 10.11611/yead.606693.
ISNAD Yılmaz, Derya. “FROM PROTECTIONISM TO TRADE WARS: THEIR EFFECTS OBSERVED THROUGH FINANCIAL MARKETS”. Yönetim ve Ekonomi Araştırmaları Dergisi 18/1 (March 2020), 1-19. https://doi.org/10.11611/yead.606693.
JAMA Yılmaz D. FROM PROTECTIONISM TO TRADE WARS: THEIR EFFECTS OBSERVED THROUGH FINANCIAL MARKETS. Yönetim ve Ekonomi Araştırmaları Dergisi. 2020;18:1–19.
MLA Yılmaz, Derya. “FROM PROTECTIONISM TO TRADE WARS: THEIR EFFECTS OBSERVED THROUGH FINANCIAL MARKETS”. Yönetim Ve Ekonomi Araştırmaları Dergisi, vol. 18, no. 1, 2020, pp. 1-19, doi:10.11611/yead.606693.
Vancouver Yılmaz D. FROM PROTECTIONISM TO TRADE WARS: THEIR EFFECTS OBSERVED THROUGH FINANCIAL MARKETS. Yönetim ve Ekonomi Araştırmaları Dergisi. 2020;18(1):1-19.