While the economic theory of utilizing comparative advantages benefits everyone, this fundamental principle can encounter difficulties when applied without considering the realities of the world. In the case of China, US leaders failed to acknowledge the reasons behind the country’s wielding of power.
Thank you for reading this post, don't forget to subscribe!Instead of assuming that increased international trade always benefits American workers and national security, the new administration under US President Joe Biden aims to invest in domestic industrial capacity and strengthen supply-chain connections with friendly nations. However, while this realignment is positive, the current policy may not be sufficient, particularly in addressing the issue presented by China.
The past eighty years have been characterized by a contradictory status quo. The United States pursued an aggressive – and at times reprehensible – foreign policy, supporting dictators and occasionally orchestrating CIA-inspired coups. Simultaneously, it also pursued globalization and internationalism in the pursuit of bringing prosperity and fostering friendliness towards America, including adopting trade and economic integration.
Now that this status quo has effectively crumbled, policymakers must articulate a cogent replacement. Two new principles could serve as the foundation of American policy. Firstly, international trade should be structured in a manner that promotes a stable global order. If trade expansion ends up empowering religious extremists or authoritarian rebels, it will adversely affect global stability and American interests. As President Franklin D. Roosevelt stated in 1936, “Autocracy in world affairs endangers peace.”
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Source: www.project-syndicate.org
