Illustration for Opinion 7

Trade Wars in a ‘Winner-takes-all’ Economy

EconPol Opinion
| News

What are the implications of Trump’s trade follies with tariffs for the rest of the world? EconPol network member Daniel Gros examines the nature of today’s trade wars by focusing on the high tech sector. He explains why differences in profit opportunities tend to escalate trade conflicts in a ‘winner takes all’ economy. Today, the US government is essentially lining up its diplomatic guns behind its internet giants, while Europe and China are baying for their monopoly profits. This is a zero-sum game, warns Gros, which can only turn negative sum through the collateral damage that it causes to the global trading system.