How To Win A Trade War is a breezily written, conversational book about trade economics. At its best, it provides cool statistics about trade that you didn't know. For instance:
When the EU dropped barriers to trade in services among its members, it became easier for, say, Polish plumbers to accept contracts in France at lower wages, costing their French competitors work. One study found that unemployment in particularly exposed areas rose and over ten years later still hadn’t fully recovered. (kindle loc 243)
There's also an acknowledgement uncommon amongst economists that increased trade leads to the current deplorable right-wing movement in politics:
British voters in places where jobs were more vulnerable to Chinese competition were more likely to back Brexit. In the 1990s, Democratic President Bill Clinton pushed through the controversial NAFTA trade deal to warnings that liberalization would destroy American jobs. While trade wasn’t billed as a very important issue in subsequent elections, the US voters most exposed to imports from Mexico responded by shifting toward the Republican Party. Then there was America’s “China shock.” Regions more exposed to import competition from China saw TV viewers shift to Fox News and campaign contributions to moderates drop. Polarization increased (elite lefties are just as capable of being hostile toward free trade as those on the right). But only the Republicans gained vote share where it mattered. In 2016, the effect was big enough to tip the vote and bring President Trump into office. (kindle loc 1344)
It's amazing that only Republicans gain vote share whenever free trade is involved. There's a lot of support in this book about how China misbehaves by deliberately subsidizing its state owned enterprises to ignore profitability. Effectively, Chinese companies get to ignore price signals and continue overproduction of goods as a way to retain or increase jobs.
The final grounds for suspicion related to the response of Chinese companies to normal market dynamics. Even when demand was depressed, China’s production steamed ahead. The Chinese ramped up their shipbuilding capacity as world trade volumes collapsed by more than a fifth between 2008 and 2009. And their steel exports grew by 76 percent (that’s a lot) between 2021 and 2024 to their highest level ever, all while global demand for steel fell by 5 percent. When prices fall, that is the market’s way of telling producers that they should curb supply. When the Chinese didn’t want to hear the message, the burden of adjustment fell on the rest of the world. (kindle loc 1920)
To be honest, it's not just economists that should hang their head in shame for not pointing this out loud and clear during the 2000s. It seems to me that military strategists are also behind the 8 ball. Western countries losing shipbuilding capability should have rang alarm bells all throughout NATO but apparently nobody did (or even said) anything.
Finally, the book talks about how to properly compensate people who lose their jobs from free trade:
The US experience offers one more conclusive piece of evidence on how to support workers affected by trade-related disruptions. Trade Adjustment Assistance was a program designed to help workers hurt by imports to find new jobs. It was small and doesn’t exist anymore. (The United States works hard to sustain its reputation for having a terrible social safety net.) But for older workers, it included an interesting component: wage insurance. If you lost your job and found a new one at a lower wage, the government would top up 50 percent of the difference for up to two years. In effect, the government was subsidizing workers’ adjustment to their financial shock. A study of the program found that eligible workers were much more likely than their ineligible counterparts to find a job quickly. That cut government spending on unemployment benefits and raised income tax payments so much that the scheme paid for itself. (This is what is known as a “wow” result.) Awkwardly, the scheme didn’t effectively encourage people to switch industries altogether, maybe because eligible workers were a little older and less keen to embark on a whole new career. And because it helped workers after losing their jobs, it probably wouldn’t encourage workers to switch jobs before a trade war broke out. But as a shock mitigation program, it’s worth a look. (kindle loc 2424)
If you think the book is snarky, it's true --- the authors try very hard to keep things light-hearted (a little too hard, in fact), and I think the book could have been shortened significantly if the authors weren't trying to be so cute all the time.
In any case, I enjoyed the book and found it a good use of my time. Recommended.