Tag Archives | protectionism

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Devaluations risk leading to a Cycle of Deflation

In February, the blog worried that we were at the start of a cycle of deflation, as depicted in the above chart from Comstock Partners. The warning signs were that major excess capacity was developing in many industries, and some major countries were devaluing. Since then, the US and China have both undertaken competitive devaluations […]

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China imposes 36% nylon tariff

Protectionism continues to build, as unemployment rises around the world. ICIS news reports China has imposed tariffs of up to 36% on nylon 6. BASF will suffer a 30.4% tariff on US exports, and Honeywell 36.2%. Last month, of course, the US hit China with a 35% tariff on tyres. The threat of more duty […]

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Tyre duties highlight protectionist pressures

Globalisation flourished whilst economic growth was strong. Jobs lost in Western countries were replaced by new jobs. Whilst cheaper production offshore kept consumer prices low, as well as bringing more people into the world economy. But today’s economic downturn means this virtuous circle is turning vicious. Western countries are becoming more protectionist and hope to […]

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Competitive devaluations begin

Last month, in discussing the ‘Cycle of Deflation’, the blog worried that “the risk is that we now see a round of competitive devaluations, as other countries also try to support their exports, and reduce import penetration”. On Thursday, the Swiss National Bank announced that the Swiss franc’s strength was “inappropriate” and said it would […]

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