FORBES: How Bad Is The Trade Climate? Here’s A New Measure




January 26, 2018 |

The Trump administration this week slapped substantial tariffs on imports of large washing machines and solar cells. The move drew particular attention because President Trump’s protectionist rhetoric had not, to date, been matched with significant new protection. Do the new tariffs mark the start of a trade war? Just how serious is the situation?

The military has a way of addressing such questions: DEFCON, a scale ranging from 5 (tranquil) to 1 (most alarming) is meant to portray ‘DEFense CONditions.’ We do not have a corresponding measure in trade, but given the concerns about where the Trump administration is heading, we need one. So…

Introducing TRADCON! It measures TRADe CONditions ranging from peaceful to full-on hostilities.

  • TRADCON 5. The free flow of goods and services across borders.
    This is not often observed in nature. Even within the European Union, ostensibly a single market, there are still barriers to trade between member countries (particularly in services). Nonetheless, the EU held this out as an internal goal. Such open trade was also often imagined as a desirable end-state, had the World Trade Organization (WTO) been more successful. We include it as an ideal.

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