The Trump Tariffs: How Do Geopolitics Affect Trade and Growth? The Case of Latin America.
With the Trump administration looking to revamp the US’ approach to trade with Latin America by striking and updating free trade deals in the region while leveraging tariff threats to curb migration, it’s probably worthwhile to look at the empirical results of the past.
In this study published in the Journal of Political Economy, which uses our ICRG data, the importance of institutions, geography, and terms of trade in Latin America are tested. Using a large panel data set and employing the Hausman-Taylor (1981) estimator to account for time-variant and time-invariant variables, the paper shows that both openness to trade and an overvalued real exchange rate are detrimental to growth in Latin America.
A mixed blessing as it stands now. Have a look when time permits.
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CHRISTOPHER MCKEE, PHD CHIEF EXECUTIVE
Christopher McKee is PRS’ CEO and Owner. An international political economist, global investor, entrepreneur, and author, Chris received his PhD from Queen’s University (Canada) and has been involved in the field of geopolitical risk, limited recourse financing, and private sector development for the past 25 years.
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