No, Trump Did Not Start the Global “Trade War” | Opinion – Newsweek

Report on Global Trade Contraction and its Implications for Sustainable Development Goals

This report analyzes the projected contraction in global merchandise trade for the current year, examining its causes, economic consequences, and profound impact on the framework of the Sustainable Development Goals (SDGs), particularly those concerning economic growth, global partnerships, and institutional stability.

1. Global Trade Downturn and its Effect on SDG 8 and SDG 17

The World Trade Organization (WTO) has forecast a 0.2 percent contraction in the volume of merchandise trade, a significant downturn following a period of strong growth. This development poses a direct challenge to the achievement of several SDGs.

• SDG 8 (Decent Work and Economic Growth): The contraction in trade, a primary engine of global economic activity, threatens economic growth, job creation, and prosperity worldwide. The WTO attributes this decline to a “surge in tariffs and trade policy uncertainty.”
• SDG 17 (Partnerships for the Goals): The current trade environment reflects a move away from the multilateral cooperation essential for SDG 17. Recent policy shifts are seen as having dealt a “lasting blow” to the post-World War II consensus on free trade, undermining the global partnerships necessary for sustainable development.

2. The Breakdown of the Rules-Based Order and SDG 16

The report identifies a fundamental shift in the global trade system, moving away from established norms and institutions. This erosion has significant implications for SDG 16, which promotes peace, justice, and strong institutions.

2.1. Attributed Causes of Institutional Erosion

While recent tariff policies are cited as an immediate cause, a deeper analysis suggests that the post-war, rules-based trade order was previously undermined by long-standing predatory trade practices that were not rectified following China’s accession to the WTO in 2001. The current U.S. administration’s policies are framed as a response to this pre-existing condition, effectively ending the pretense that the former system was still functional.

2.2. The “Interregnum” and Geopolitical Instability

Experts characterize the current global situation as a dangerous “interregnum between one world order and another.” This period of instability directly threatens the foundations of SDG 16.

1. Weakening of Global Institutions: The shift away from the WTO-centric system towards unilateral actions weakens the very institutions designed to maintain peace and order.
2. Increased Geopolitical Risk: The transition between global orders is historically a phase of heightened conflict risk, jeopardizing peace and security, which are prerequisites for any sustainable development.

3. National Economic Responses and Alignment with SDG 9

In response to the changing global landscape, there is a notable policy shift towards strengthening domestic economies, which aligns with SDG 9 (Industry, Innovation, and Infrastructure).

3.1. Economic Impacts of Tariff Policies

Contrary to initial concerns, the implementation of tariffs has not resulted in significant negative domestic consequences in the U.S. economy. Key observations include:

• Inflation Control: A feared surge in inflation has not materialized.
• Economic Resilience: The broader economy and financial markets have not experienced a slump.
• Tariff Revenue: The federal government has seen a substantial increase in net tariff revenue.
• Price Absorption: Evidence suggests that foreign-based exporters, rather than domestic consumers, are absorbing the costs of many tariffs, with import prices from major partners declining.

3.2. Fostering Domestic Industry

The current trade strategy is seen as a catalyst for achieving objectives related to SDG 9. By creating a tariff wall, the policy aims to stimulate American-owned manufacturing and encourage foreign investment within the U.S. to bypass trade barriers. This bipartisan protectionist shift is viewed as a fundamental change in trade politics, prioritizing the rebuilding of domestic industrial capacity, a core component of SDG 9.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

1. SDG 8: Decent Work and Economic Growth

   • The article extensively discusses economic issues, including global trade forecasts, economic growth, and the impact of trade policies on national economies. It mentions the World Trade Organization’s forecast of a contraction in merchandise trade and concerns about what tariff policies “would do to growth.”

2. SDG 9: Industry, Innovation and Infrastructure

   • The article directly addresses the theme of industrialization by highlighting the need for the U.S. to “stimulate American-owned manufacturing” and “rebuild American manufacturing behind his new tariff wall.” This connects to the goal of promoting sustainable industrialization.

3. SDG 16: Peace, Justice and Strong Institutions

   • The article discusses the breakdown of the global governance system related to trade. It states that “the post-war rules-based trade order is dead” and references the World Trade Organization’s role and the geopolitical instability arising from the shift in trade policies, as noted by Singapore’s Foreign Minister: “the most dangerous phase is the interregnum between one world order and another.”

4. SDG 17: Partnerships for the Goals

   • This SDG is central to the article, which focuses on the disruption of the global trade system. It discusses the move away from a “multilateral trading system” towards protectionist policies, tariffs, and trade wars. The article explicitly mentions the breakdown of “long-term cooperation” and the role of the World Trade Organization, which are key components of SDG 17.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Target 17.10: Promote a universal, rules-based, open, non-discriminatory and equitable multilateral trading system under the World Trade Organization.

   • The article’s core theme is the disruption of this very system. It quotes that “the post-war rules-based trade order is dead” and blames the situation on “a surge in tariffs and trade policy uncertainty,” which are direct contradictions to an open and rules-based system.

2. Target 9.2: Promote inclusive and sustainable industrialization and, by 2030, significantly raise industry’s share of employment and gross domestic product.

   • The article points to a national policy objective to “stimulate American-owned manufacturing” and “rebuild American manufacturing.” This directly aligns with the goal of raising the industry’s share of the economy.

3. Target 17.13: Enhance global macroeconomic stability, including through policy coordination and policy coherence.

   • The article highlights a lack of policy coherence and stability. It mentions that Trump’s tariff moves have been “needlessly complicated and erratic” and that his policies have “panicked global financial markets, raised the risk of a recession and broken the political and economic alliances.”

4. Target 8.a: Increase Aid for Trade support for developing countries.

   • While not promoting it, the article discusses actions that are the opposite of this target. The implementation of tariffs against trade partners like China and Mexico represents a move away from supporting trade and instead creates barriers, making this target relevant by its absence and contradiction.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

1. Volume of Merchandise Trade

   • The article explicitly states that the World Trade Organization forecasts “the volume of merchandise trade this year will contract by 0.2 percent.” This is a direct quantitative indicator for measuring the health of global trade (relevant to SDG 8 and SDG 17).

2. Tariff Rates and Revenue

   • The article points to “a surge in tariffs” and “tariff hikes” as a key policy shift. It provides a specific data point: “$26.6 billion come in the month of June” in “net tariff revenue.” The level of tariffs and the revenue they generate are clear indicators of protectionist measures, relevant to measuring the openness of the trading system (Target 17.10).

3. Import and Export Prices

   • The article provides specific indicators on the impact of tariffs on prices. It notes that “Import prices from major trade competitors such as China, Mexico, and Canada are down on an annual basis” and that “on an annual basis the per-vehicle prices of Japanese auto exports to the U.S. have nosedived nearly 30 percent.” These price changes are indicators of trade friction and its economic consequences.

4. Share of Domestic Manufacturing

   • While no specific number is given, the goal to “stimulate American-owned manufacturing” implies that the share of manufacturing in the national economy is a key indicator being monitored and targeted by the administration’s policies (relevant to Target 9.2).

4. Table of SDGs, Targets, and Indicators

Source: newsweek.com