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The economic implications of rising protectionism: a euro area and global perspective

Author

Listed:
  • Gunnella, Vanessa
  • Quaglietti, Lucia

Abstract

The risk of a trade war came sharply into focus in 2018, as protectionist threats by the US Administration and its trading partners were followed by concrete actions. Tensions rose over the summer and, while these have been defused on some fronts, the risk of further escalation remains material. The impact of the measures implemented so far on the global and euro area economic outlooks is expected to remain contained. However, the negative impact could become much greater if trade tensions were to escalate further. Uncertainty related to protectionism is weighing on economic sentiment and it may raise further, potentially eroding confidence and affecting the euro area and the global economy more significantly. The complexity of intertwined international production chains could also magnify the impact. Against this backdrop, this article reviews the changes in the trade policy landscape over the past decade. It discusses the macroeconomic implications of the recent surge in protectionism and evaluates the possible effects that an escalation in trade tensions could have on the global economy and the euro area. JEL Classification: F13, F14

Suggested Citation

  • Gunnella, Vanessa & Quaglietti, Lucia, 2019. "The economic implications of rising protectionism: a euro area and global perspective," Economic Bulletin Articles, European Central Bank, vol. 3.
    • Handle: RePEc:ecb:ecbart:2019:0003:1
    Note: 2700331
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    File URL: https://www.ecb.europa.eu//pub/economic-bulletin/articles/2019/html/ecb.ebart201903_01~e589a502e5.en.html
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    Citations

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    Cited by:

    1. Escaith, Hubert, 2021. "Withering globalization? The Global Value Chain effects of trade decoupling," MPRA Paper 107935, University Library of Munich, Germany.
    2. Sascha Tobias Wengerek, 2020. "Share price reactions to tariff imposition announcements in the Trump era - An event study of the trade conflict," Working Papers Dissertations 59, Paderborn University, Faculty of Business Administration and Economics.
    3. Vlatka Bilas, 2018. "World Trade Organization and regional economic integrations: together in future or not?," International Studies, Libertas International University, vol. 18(1-2), pages 49-64.
    4. Hajkowicz, Stefan & Bratanova, Alexandra & Schleiger, Emma & Brosnan, A, 2020. "Global trade and investment megatrends," MPRA Paper 113240, University Library of Munich, Germany.
    5. Mereke Tanaguzova & Simeon Nanovsky & Serik Orazgaliyev, 2023. "Assessing the Effect of Joining the World Trade Organization on Trade Performance: A Study of CIS Countries," Economies, MDPI, vol. 11(9), pages 1-17, September.
    6. Iván Kataryniuk & Javier Pérez & Francesca Viani, 2021. "(De-)Globalisation of trade and regionalisation: a survey of the facts and arguments," Occasional Papers 2124, Banco de España.

    More about this item

    Keywords

    International trade; protectionism; tariffs; Trade War;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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