Protectionism is back, above all, in the US. The driving forces behind it are xenophobia and nostalgia. Arguments can be made for a degree of self-sufficiency, for reasons of national security. But those arguments need meticulous assessment. This is not what has been happening, certainly not under Donald Trump. But though the tone is different under Joe Biden, the reality is not, alas. On the contrary, protection has become one of the few issues on which there is bipartisan consensus.
The communiqué issued by the leaders of the G7 stated that, “We have agreed . . . to . . . secure our future prosperity by championing freer, fairer trade within a reformed trading system”. This papers over cracks between the US, increasingly doubtful about trade and, say, Germany, dependent upon trade for its prosperity, as is true of all the smaller high-income countries.
It is not surprising that a large country with a sophisticated economy and diverse resources, such as the US, tends to trade less intensively than smaller ones and so cares less about it. It gains many of the benefits of trade through internal specialisation. But, as Anne Krueger argues in her book, International Trade, trade has been the handmaid of economic growth, across the world, since the second world war.