In this special edition of Current Accounts, the Hinrich Foundation’s podcast on global trade, the Association of Foreign Press Correspondents-USA sits down with Senior Research Fellow Stewart Paterson to unpack the US dollar’s global dominance and what we are still getting wrong.

As the linchpin of the international monetary system, the US dollar’s role extends far beyond America's borders, influencing trade flows, shaping investment decisions, and anchoring global financial stability. Beneath the surface of this dominance lies a host of unresolved tensions, from sustained trade imbalances and currency misalignments to the political and economic strains these dynamics impose on both emerging and advanced economies alike.

While the Trump administration has imposed protectionist measures, such as tariffs, to address concerns about domestic industry and employment, the prolonged weakening of the dollar since January has resulted not from these policies but from a deeper set of worries among investors across asset classes over the intense and ongoing fiscal and business uncertainty created by the administration’s policies. Though Paterson found much to dislike about the way Trump’s tariffs were derived, he notes that an inadvertent outcome may be the real effective depreciation of the US dollar. Such weakening is needed if the policy goal is to return the American economy to external balance, given the dollar’s overvaluation and persistent US deficit spending.

Tune in to this podcast as Senior Research Fellow Stewart Paterson joins the Association of Foreign Press Correspondents-USA to break down the driving factors behind the dollar’s global dominance, which follows up on Paterson’s research paper for the Hinrich Foundation, “Trump, the US dollar, and American trade policy.”

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In this special edition of Current Accounts, the Hinrich Foundation’s podcast on global trade, the US Association of Foreign Press Correspondents sits down with Craig Allen, former President of the US-China Business Council, to assess how China is redefining innovation, what the US gets wrong about it, and why this global race is more complex and consequential than ever.

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In this special edition of Current Accounts, the Hinrich Foundation’s podcast on global trade, the US Association of Foreign Press Correspondents sits down with Senior Research Fellow Stewart Paterson to unpack why China has struggled to rebalance its economy toward the consumption-led growth it desperately needs.

China’s economic slowdown is sending shockwaves across global markets, raising concerns about the future of the world’s second-largest economy. Once a key driver of global growth, the country now faces a range of challenges, from a sluggish property sector and mounting local government debt to declining foreign investment and weakened consumer demand. These issues, coupled with the government’s cautious approach to stimulus and ongoing geopolitical tensions, has sparked debate about whether China can regain its economic momentum. As businesses and investors worldwide watch closely, the question remains: why it is almost impossible to re-engineer China’s political economy?

Central to the issue is China’s investment-led growth model, which has driven massive infrastructure development, but it has also led to diminishing returns. The state-controlled, bank-dominated financial system has resulted in a surge of non-performing loans, highlighting inefficiencies in the country’s investment strategy. With capital accumulation now outpacing returns, China faces escalating financial risks, including the potential for a major crisis.

Furthermore, despite years of effort, China has struggled to shift toward a consumption-driven economy, where domestic demand could play a more significant role in growth. Structural barriers such as income inequality, high savings rates, and an undervalued currency make this transition difficult. The government’s reluctance to relinquish control over the economy, prioritizing trade surpluses and state-directed investments, further complicates the shift. To pivot towards a consumption-based model, China would need to implement sweeping reforms, including a more progressive tax system, improved social security, and higher wages. Without these changes, China risks prolonged stagnation and financial crises that could derail its long-term growth and geopolitical aspirations.

Tune into this podcast as Senior Research Fellow Stewart Paterson joins the Association of Foreign Press Correspondents-USA to break down the key factors behind China’s sluggish growth and what it means for global markets.

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In this special edition of Current Accounts, the Hinrich Foundation’s podcast on global trade, the US Association of Foreign Press Correspondents sits down with Senior Research Fellow Keith Rockwell to discuss how Europe plans to deal with Trump’s tariffs and their impact on the world’s most important alliance.

On 10 February, Donald Trump announced a 25% tariff on aluminum and steel imports. As promised during his campaign, he plans to expand his tariff blanket further, imposing 10% to 20% duties on all imports into the United States from every country. For export-dependent Europe, this is not good news. While European leaders claim they are better prepared for Trump’s second term, the reality is they are in a far weaker position than in his first.

With a major war on its eastern border, crushing energy costs, and political turmoil roiling the union’s anchor members Germany and France, stability across the continent is at risk as Trump forges ahead without the EU to cut a deal with Russia President Vladimir Putin.

Tune into this special podcast as Senior Research Fellow Keith Rockwell sits down the Association of Foreign Press Correspondents-USA to probe Europe’s strategy and the potential impact of Trump’s tariffs on the most important alliance in the world.

Rockwell’s recent research for the Hinrich Foundation explores Europe’s two-pronged approach to deal with Trump and his tariffs. The European Commission is preparing both carrots and sticks, seeking to strike trade deals or retaliate forcefully if necessary. Even as European leaders weigh retaliation against the US on LNG imports, investment in US manufacturing, and military purchases, many in Europe believe negotiation is the best path forward, aiming to avoid a tit-for-tat trade war by increasing imports from the US rather than facing broad restrictions on EU exports. There is a lot to lose on both sides of the Atlantic.

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In this special edition of Current Accounts, the Hinrich Foundation’s podcast on global trade, the Association of Foreign Press Correspondents-USA sits down with Jia Hui Tee, Senior Trade Policy Analyst at the Hinrich Foundation, to discuss the rise of industrial policies and potential implications to trade and sustainability.

In recent years, industrial policies have become a primary focus for governments worldwide. These policies, aimed at strengthening domestic industries, have significant implications for global trade and sustainability. As identified in the Hinrich-IMD Sustainable Trade Index 2024, global trade is experiencing a protectionist shift, with nations implementing measures to fortify their domestic sectors and secure supply chains for strategic goods. This year's STI indicates a notable increase in both tariff and non-tariff barriers, particularly by economies such as the United States, India, and China.

With the heightened emphasis on supply chain resilience and national security, countries are increasingly focused on ensuring the production of strategic goods and technologies to maintain their competitive advantage. Such actions may have profound effects on trade outcomes, as highly protectionist policies could potentially strain international trade relations. It is, therefore, crucial to strike a balance in the application of industrial policies to prevent adverse consequences such as resource misallocation, trade fragmentation, and environmental harm.

Tune into this special episode as Jia Hui Tee, Senior Trade Policy Analyst at the Hinrich Foundation, delves into the rise of industrial policies, how they impact trade and sustainability, and what governments can do to minimize their negative impacts on their trading partners.

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After a long dormant period, industrial policy is back and dramatically reshaping global manufacturing. As large-scale subsidies proliferate, countries that used to take a laissez-faire approach to market governance have entered a race to subsidize strategic sectors. Companies are responding.

Tune in here for an experimental 'podcast' on Kieran Thompson's 'Fighting subsidies with subsidies' article, created with Google's AI research assistant NotebookLM.

Tune into the Hinrich Foundation’s podcast series for insights on international trade.

In this special edition of Current Accounts, the Hinrich Foundation’s podcast on global trade, the US Association of Foreign Press Correspondents sits down with Keith Rockwell, Senior Research Fellow at the Hinrich Foundation, to discuss the future of Europe’s trade dynamics in light of its shifting political landscape.

While the recent elections in Europe have not yet led to significant shifts in its trade and business landscape, the steady rise of far-right parties is setting the stage for future upheavals. These political movements challenge the very foundation of the European Union’s (EU) single market, which is built on free movement and multilateral cooperation. The Hinrich Foundation’s recent research examines how the surge in nationalism is driving new divisions within Europe, potentially undermining the region’s commitment to open borders and international trade. As these parties strengthen their foothold, their push for protectionist policies could reshape the flow of talent and capital, affecting not just trade but also the broader integration of European economies.

Some right-wing factions, especially in countries like France and Germany, are adopting pro-business approaches, tempering their traditionally anti-trade rhetoric to appeal to a broader electorate. However, this shift may be more tactical than permanent, as the underlying nationalist and protectionist ideals remain deeply embedded in these movements. The growing influence of such ideologies across Europe raises questions about the long-term stability of trade and economic policies within the EU.

Tune into this special episode as Keith Rockwell, Senior Research Fellow at the Hinrich Foundation, discusses the rising influence of far-right parties across Europe and its potential impact on the region’s trade policies, immigration, and the core principles of the EU.

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In this special edition of Current Accounts, the Hinrich Foundation’s podcast on global trade, the US Association of Foreign Press Correspondents interviews Deborah Elms on the WTO’s landmark e-commerce agreement.

In July, The Joint Statement Initiative (JSI) on Electronic Commerce achieved a historic milestone in global trade, as 82 World Trade Organization (WTO) members released a “stabilized text”, potentially setting the first digital trade rules. This is a significant development, addressing the WTO's previous lack of a digital trade framework and aiming to create unified, consistent regulations for e-commerce. This agreement, remarkably, was reached without the participation of United State, with major players like China and the European Union joining forces with smaller nations such as Benin and Laos.

The JSI's impact is particularly significant for developing countries, which face significant challenges due to regulatory fragmentation. By addressing these challenges, the JSI aims to foster a more equitable digital trade landscape worldwide. The initiative’s inclusive approach includes commitments for cooperation and development, helping them integrate into the global digital economy. The agreement also aims to facilitate trade for smaller firms by allowing electronic paperwork and signatures, simplifying cross-border transactions.

Despite the progress, achieving consensus at the WTO remains a challenge. Although 82 WTO members have endorsed the JSI’s text, some remain dissatisfied, complicating the integration of these rules into the broader WTO framework. Any dissenting member, including the US, can block progress, leaving the signatories to navigate these disagreements and determine the path forward.

Tune in to this special episode as Deborah Elms, Head of Trade Policy at the Hinrich Foundation, dissects the WTO's historic e-commerce agreement and its potential impact on the future of digital trade.

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