In this interactive feature, we look at trends in global trade and highlight opportunities to strengthen US economic competitiveness through trade. 

Looking Anew at Trade

Interactive: Looking Anew at Trade

Foreword: Defining America’s New Playbook

The broad post–Cold War economic expansion resulted from a playbook dubbed the “Washington Consensus.” Consisting of 10 policy recommendations, it advocated for market-driven domestic economies and an openness to trade and investment. Now however, a new playbook is needed as authoritarian powers take advantage of openness to monopolize critical elements and capture key technologies. Lacking a new framework, the pursuit of supply chain resilience often slides into raw protectionism. Technology restrictions bifurcate markets without an understanding of far-reaching consequences. Efforts to match foreign subsidies with local subsidies lead to America undermining the rules-based order it birthed, creating frictions among its closest allies.

Finding the right balance between markets and intervention is key. Close collaboration with allies is also vital.

In democracy’s tug and pull between embracing markets and imposing constraints to advance specific goals, the American economy has, over time, tilted more toward markets than have other great power economies. This result—cheered by some, jeered by others—has always been a defining fault line in policy debates. Efforts to offset the distortions of mercantilist competitors and spur green energy have led to greater government involvement in commercial affairs. Even as the line of scrimmage has shifted, the contest to find the correct balance between government intervention and market forces remains a prime issue.

Finding the right balance between markets and intervention is key. Close collaboration with allies is also vital. America faces a peer rival: China. Only in tandem with its allies can the US  achieve the scale to sustain the international order and deter aggression.

Former US President Donald Trump saw the offense America was facing, so he hurriedly ran a few new defensive plays, notably tariffs, turning the US government’s attention to supply chains, imposing restrictions to protect digital security, and upgrading development finance. Yet, with his pulling the US out of the Pacific trade pact, he led America to forfeit an excellent opportunity to tie Asian economies to itself and encourage China to accept higher standards. And by imposing tariffs on US friends and rivals alike, he dispersed the coalition needed to enforce trade standards.

A new playbook is needed that provides direction and unity—for policymakers and allies.

The Biden administration has run a few defensive plays of its own, including an intensified focus on supply chains, and restrictions on semiconductors. And it has added a few offensive plays, like greater incentives for building domestic production capabilities—advanced semiconductor fabricators, batteries, and electric vehicles—and investing more in research to keep the edge in innovation. Yet not intervening, as other presidents have done, to prevent Congress from economically discriminating against US trading partners when advancing industrial policy, has resulted in a further fracturing of alliances. 

Today’s interventions are being tested. Some are effective. For instance, Operation Warp Speed delivered effective vaccines more quickly than what would have resulted from market forces or government alone. Some are not effective. The lack of coordination on climate incentives caused unnecessary harmful factures with allies.

For all the economic assertiveness, these actions cut against the very fabric of established doctrines and alliances alike, causing uncertainty and friction. A new playbook is needed that provides direction and unity—for policymakers and allies.

 was inspired by a growing effort by the Wilson Center to help define a new rulebook to meet today’s challenges. This effort includes establishing the 

Wahba Institute for Strategic Competition

. Through in-depth analysis, multimedia content, high-level convenings, and other elements, the Wahba Institute will examine four key areas of strategic competition: economic statecraft, trade, infrastructure, and energy.

, titled “Strategic Competition: Strengthening America’s Advantage in a Competitive World,” highlights the advantages, risks, and opportunities for the United States and its allies in today’s competitive world. It offers a range of articles on the theme of strategic competition that address trade and alliances, energy and infrastructure, and innovation and technology.

Today, when there is little consensus in Washington, it is essential for the United States to chart a sustained path of strategic competition not only for our own national interests, but also in concert with other like-minded nations. This is the global imperative of our time, the goal of the Wahba Institute for Strategic Competition, and the focus of this issue.

The Wilson Center has established the Wahba Institute for Strategic Competition, or WISC, a new cross-cutting initiative aimed at shaping conversations and proposing meaningful policy reforms to strengthen American leadership in the era of “great power competition.” The new initiative has been made possible by a generous transformational multi-year commitment from the Wahba Foundation.

, PhD, is a member of the Wilson Center’s Global Advisory Council and National Cabinet, and will serve as chair of WISC’s Steering Committee. A member of President Biden’s National Infrastructure Advisory Council, Wahba earned a doctorate degree in economics from Harvard University and began his career as an economist for the World Bank.

Mark Kennedy, director of the Wahba Institute for Strategic Competition, is dedicated to strengthening America’s alliances and their mutually beneficial economic power projection. Kennedy applies experiences as a first-generation college graduate, Congressman, university president, senior officer of company now known as Macy’s, presidentially appointed trade advisor, founder of the Economic Club of Minnesota and author of an Ivy League published book. He has engaged wide cross-sections of society in over 45 countries, including refugee camps and war zones. An appointed Civic Leader supporting the Secretary of the Air Force, Kennedy has visited over 40 military bases and three aircraft carriers at sea.

Cover photo: Industrial port at dawn, Shanghai, China. Shutterstock/fotohunter.