Welcome to the final Trade Secrets of 2024. Today I’m looking back at the events of the past year through what I wrote about it at the time. To summarise: geopolitical tensions are threatening to knock globalisation off course, but each year brings more evidence of the world trading system’s resilience to them. Charted Waters is on Europe’s economic prospects. I’ll be back a week from now with the first newsletter of 2025 on January 6. Until then, a very happy new year to all.
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Trading up, trading down
Shutting off Suez
The year kicked off with the latest threat to the global trading system in the form of the Houthi attacks gumming up the Suez Canal. I was optimistic that the world economy and the trading system was well placed to ride the shock, only hedging the prediction a little in “Why Red Sea attacks won’t derail globalisation (Probably)” on January 8 and expanding further in “The red ink that flows from the Red Sea attacks” on January 15.
The incident did underline one of those long-term threats, though. In “The world cannot depend on the US to keep trade peace” on January 18 I argued that American foreign policy was only intermittently aligned with commercial interests.
Policymakers spring into inaction
I tried heroically to be optimistic about the WTO as a negotiating body ahead of its ministerial meeting in Abu Dhabi in late February in “The case for the WTO. (No, really.)” on February 26. Sadly, the ministerial didn’t produce much concord on how to combine environmentalism with trade policy (“A weak WTO will damage the planet more than it hurts free trade” on March 4) but then again neither did a lot of policymaking during the year.
The usual suspicion between the usual suspects
Speaking of which, there was clearly never going to be any kind of rapprochement between the US and China with the US presidential election ahead, as I noted on March 11 in “Theatrical strife over tariffs that might get Biden re-elected”. And the Biden administration’s insistence that allies sacrifice their own principles to its obsession with the US steel industry (“Lie back and think of Pennsylvania” on March 18) also ensured continued tense relations with the EU.
Despite the administration attempting to sound internationalist — “Biden tries a White House reset on climate and trade” on April 22 — I said that the US’s green transition plans were fundamentally inward-looking in “US is skulking behind EV tariff walls” on May 13.
The frenmity between Brussels and Beijing
Mind you, just because the EU wasn’t getting on with the US didn’t necessarily mean Brussels would be all pally with Beijing, as I argued on May 7 in “Xi’s visit stress-tests Macron’s plans for a sovereign Europe”. That newsletter was notable for containing my most wince-inducing headline pun of the year, “Xi loves EU, yeah, yeah, yeah.” I’m not sorry. I argued that the EU’s antisubsidy tariffs against Chinese EVs produced predictable threats in response in “Beijing returns fire against Washington and Brussels” on June 3. Though I also underlined that this was an attempt to structure a negotiation rather than start an all-out trade war in “EU gambles on diplomatic approach with Chinese electric vehicles” on June 17.
The EU goes it alone on green trade
In the absence of international agreements on climate change and trade, Brussels pushed ahead with its unilateral moves on carbon border tariffs and deforestation. I discussed how these aroused a lot of irritation among trading partners in “Why Brussels can’t see the deforestation for the trees” on July 18 and “Small isn’t beautiful when you’re paying EU carbon tariffs” on July 29.
The bright cloud that belies its dark lining
And yet despite the diplomatic strife, actual trade has largely been fine. On August 29 I noted another catastrophe that didn’t happen in “How open trade saved us from a global food crisis”, despite one of the world’s biggest grain exporters (Russia) having invaded another (Ukraine) and then explicitly threatened to make international famine a geopolitical weapon.
Similarly, the global burst of inflation after the end of the Covid-19 lockdowns and the invasion of Ukraine was dissipating without inflicting serious damage on the world economy, with monetary policymakers having wisely not overreacted (“Stagflation piece of polycrisis has stubbornly failed to materialise” on September 23). And who else apart from the central bankers deserve some applause for the generally perky state of global trade? The companies who actually run it. On September 26 I had a look at how the flat-pack furniture giant Ikea kept its operations going with “How supply chain superheroes have kept world trade flowing”.
And then came Trump
The last two months have been all Trump, all the time. My pieces have been united by the thesis (which you’re going to hear a lot more about next year) that the main point about his trade policy isn’t so much its radicalism as the chaos in which it will be made, and his overconfidence about how much leverage tariffs give him over other countries. Hence on October 31 I looked at “The internal rivalries that will determine Trump’s policies on trade”. On November 7, just after the election, I discussed the damage Trump will do to the US if he really does try to close deficits with tariffs in “Trump’s tariff obsession is worse than before”, and on December 5 on how “Tariff Man’s superpowers are weaker than he thinks”.
Christmas cheer
As a fundamentally optimistic person (about trade if not trade policymaking), my final shot of the year on December 19 was “The wondrous gift of open trade is given”, about all the things that might have gone wrong in 2024, but didn’t.
Charted waters
What with the Eurozone debt crisis and all, Europe’s major economies haven’t exactly had a stellar couple of decades and it seems likely to get worse.
Trade links
The FT’s Gideon Rachman looks at how the US has become a radically revisionist state that wants to overturn the international order.
A new paper by Aaditya Mattoo of the World Bank, Michele Ruta of the IMF and Robert W Staiger of Dartmouth College on geopolitics and trade.
A story in Bloomberg looks at how smaller “minilateral” deals on the environment can compensate for the lack of progress with bigger agreements such as the COP meeting and a treaty on plastics production.
The FT examines how the sharp appreciation of the Argentine peso, which rose by far more in real terms than any other widely traded currency this year, is putting pressure on the economy.
Trade Secrets is edited by Georgina Quach today.
