It is evident that the world is changing. The strategic withdrawal by the United States from the global rules-based system has raised new questions about the future of global governance. Most nations continue to hold on to the principles of global collaboration, and for a good reason. The existing system has allowed for unparalleled economic growth in the post-World War II era through free trade. Can the rules-based system survive? I believe the existing global governance structure can be preserved through the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The CPTPP: A Shield and a Standard-Setter The CPTPP is one of the most sophisticated trade agreements in the world, encompassing free trade in goods and services, robust intellectual property protection, facilitated business travel, stringent labor standards, and government procurement opportunities. The trading block consists primarily of middle powers: Australia, Brunei Darussalam, Canada, Chile...
President Trump’s tariff strategy, aimed at revitalizing American manufacturing, continues to spark debate across economic and political circles. While the intent is clear, the broader implications raise important questions about its alignment with long-term economic trends.
The U.S. manufacturing sector has steadily shrunk over the past five decades, falling from 23% of GDP in 1970 to just 9.7% in early 2025. Job losses have followed suit, prompting concern among policymakers and workers alike. Yet this decline is not unique to the United States. Similar patterns are evident in Canada, Germany, and Japan.
Economists point to a natural evolution in advanced economies: agriculture gives way to manufacturing, which in turn is overtaken by services. In the U.S., the service sector has expanded from 71.8% of GDP in 1997 to 83.7% in 2025, driving employment growth and contributing to a low unemployment rate of 4.1%. While this figure suggests economic strength, it also signals potential inflationary pressure due to tight labor markets.
Certain industries, such as steel, agriculture, and pharmaceuticals, carry national security weight. However, targeted investments and regulatory reforms may be more effective than blanket tariffs. Canada’s post-pandemic vaccine strategy, which relied on coordinated public investment rather than protectionist measures, offers a compelling case study.
Tariffs often come with unintended consequences. The U.S.-China trade tensions between 2018 and 2020 led to an estimated $48 billion in added costs for American consumers and manufacturers in 2019 alone, according to the Federal Reserve. These figures highlight the ripple effects on domestic supply chains and consumer prices.
Beyond economics, tariffs risk straining relationships with key allies. Canada, for instance, may respond with reciprocal measures, potentially harming industries on both sides of the border. Trade disputes can also spill into broader foreign policy arenas, complicating international cooperation.
The evidence suggests that
embracing the service economy while selectively supporting strategic
manufacturing sectors may offer a more sustainable path. This approach not only
aligns with economic realities but also preserves diplomatic goodwill — particularly
with close partners like Canada.
Read my full op-ed on The Hill Times:
Trump's tariffs are a collision with economic reality - The Hill Times
Comments
Post a Comment