The good, the bad, and the ugly: A decisive election for trade, or is the writing already on the wall? NZIER Insight 116

The United States elections are upon us, and uncertainty prevails. The only thing certain, it seems, is the continuation of tariffs and more tariffs. None of this is good for the United States economy or the world economy since they act as a drag on all economies. Still, United States politicians seem determined to pursue what we know are failed policies. It is unlikely that anything good related to trade will come of this election. 

Once you head down the tariff road, the answer to the tariff question is always more tariffs, not less. The situation is already bad since trade policy settings in the United States were set in 2016 at the beginning of the Trump Administration. The chances are that things will get ugly as countries retaliate against the United States' intransigence on tariff policy. Even the Democrats who profess only to like tariffs a little bit have only one trade policy option – more tariffs. 

What can New Zealand do? The answer is to stick to our trade policy knitting, foster coalitions of the willing and seek out opportunities to improve our trade policy effectiveness and efficiency. Ironically, the incoherence of the United States' position is well understood by many small and medium-sized nations; therefore, they are more likely to be receptive to New Zealand [and Australia] being innovative in trade policy.