This episode of Real Life Economics focuses on international trade theory, trade tariffs and trade war. Tariffs are a subject you can’t ignore these days, but what does that actually mean to you? International Trade Theory strongly suggests that trade is a win-win with economists like Adam Smith and David Ricardo pushing theories of absolute and comparative advantage, so why do countries impose trade barriers like trade tariffs? The reality is that they have been tools for development for many years, allowing developing nations to protect infant industries as well as allowing developed nations to protect strategically important industries. As a result, trade and currencies have become misaligned over the years and trade agreements have contributed to the growing inequality that is plaguing the globe. We discuss this issue with special guest Dr. Robert Scott, Senior Economist and Director of Trade and Manufacturing Policy Research at the Economic Policy Institute.
