Final answer:
Two theories of international political economy (mercantilism and liberalism) shed light on the Trump and Biden administrations' trade policies. American protectionism is not new, but recent tariffs have sparked concerns about the international trading regime. A change in U.S. trade policy could lead to trade wars and undermine the rules-based system.
Step-by-step explanation:
Theories of International Political Economy
Two theories of international political economy are the mercantilist theory and the liberal theory.
The mercantilist theory suggests that a country's economic power is determined by its accumulation of wealth, particularly through exports and a favorable balance of trade. This theory supports protectionist policies, such as tariffs and trade barriers, to promote domestic industries and maintain a trade surplus. The Trump administration's tariffs can be seen as a manifestation of this theory, as they aim to protect American industries.
The liberal theory, on the other hand, emphasizes the benefits of free trade and open markets. It argues that unrestricted trade promotes economic efficiency, fosters global cooperation, and benefits all participating countries. The Biden administration's stance on trade policy may align more with this theory, as it has expressed a desire to reengage with international institutions and pursue multilateral trade agreements.
American Protectionism and the International Trading Regime
American protectionism is not a new phenomenon. Throughout history, the United States has implemented various forms of protectionist policies to safeguard domestic industries and promote national interests. However, the recent tariffs imposed by the Trump administration did mark a shift towards a more protectionist stance, which was viewed by some as a threat to multilateralism and the international trading regime.
A change in U.S. trade policy can have significant implications for the international trading regime. The United States is one of the largest economies in the world, and its trade policies can influence global trade dynamics. If the U.S. adopts a more protectionist approach, it may lead to retaliatory measures from other countries, potentially resulting in trade wars and a decline in overall trade volumes. Furthermore, a shift away from free trade could undermine the rules-based international trading system, which relies on mutual cooperation and adherence to established norms and regulations.