WEBINAR RECORDING · 2024-11
The New American Trade Policy
In this conversation: Mary Lovely; moderator Michael Ferrantino; hosts Ben Shepherd and Hanna Norberg.
In November 2024, Mary Lovely and Michael Ferrantino examine the prospective US tariff agenda through input costs, tax policy, investment and retaliation. Audience questions draw out origin rules, supply-chain research and the difficulty of dividing the world into stable blocs.
Session information draws on the recording and its original description. Affiliations and policy context refer to the time of the webinar.
FROM THE CONVERSATION
Three takeaways.
What they mean in practice.
Prepared from the session recording using automatic transcription and editorial review. Follow the timestamp links for the original wording and context.
Protection for one producer raises another’s costs
Watch 09:43 ↗Lovely explains how imported machinery, components and equipment enter US production. Firms may favor protection for outputs while seeking input exemptions. She connects this lobbying to tax-policy bargaining and argues that input costs weaken export competitiveness.
Policy interpretation: Evaluate protection across production chains, including downstream exporters and households, not only shielded firms.
Tariff-induced investment is not a net competitiveness gain
Watch 19:42 ↗Lovely expects investment serving a protected US market but distinguishes competitively producing for export. Input costs and retaliation may undermine the latter. Ferrantino asks whether additional investors only partly offset excluded competitors.
Policy interpretation: Compare investment with the counterfactual and assess productivity, competition and export access rather than announcements alone.
Supply-chain adjustment is more than relabeling trade
Watch 31:31 ↗Answering Shepherd, Lovely distinguishes legitimate foreign inputs under origin rules from evasion. She identifies the speed, cost and firm-size distribution of reorganization as research priorities, noting that countries with existing capacity were better positioned to receive diverted activity.
Policy interpretation: Separate compliant relocation from circumvention and investigate costs before assuming sourcing moves quickly or equally across firms.
From the discussion
Ferrantino asks when retaliation becomes bargaining rather than added consumer costs (33:26). Lovely distinguishes incentives according to whether a deal appears available. She cautions against extrapolating earlier elasticities to exceptional shocks (37:51–39:25), and warns that security relationships and production networks do not align neatly into blocs (51:42–55:43).
