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The True Toll of the Trade War



For much of the last century, the United States managed and protected the rules-based trading system it created at the end of World War II. That system required a fundamental break from the pre-war environment of mutual suspicion between competing powers. The US urged everyone to see that growth and development for one country could benefit all countries through increased trade and investment.

Under the new dispensation, rules were enacted to constrain selfish behavior and coercive threats by the economically powerful. The US served as a benevolent hegemon, administering the occasional rap on the knuckles to those acting in bad faith. Meanwhile, the system’s multilateral institutions, especially the International Monetary Fund, helped countries in dire need of funds, provided they followed the rules.

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