Editor’s Note: Asian economies are seeing strong, stable growth and leading the world out of the recession. In the December 2009 issue of the IMF’s Finance & Development, Eswar Prasad discusses how Asian emerging markets can improve their economic welfare by rebalancing growth toward domestic demand.
With the increasing importance of Asian emerging markets in the world economy, rebalancing growth in developing Asia toward more reliance on domestic demand and less on exports is an important component of the global effort to stabilize world financial and economic systems.
Asia’s export-oriented growth strategy played a role in the global imbalances that have characterized the international economy in recent years and played some role—though how much is hotly debated—in contributing to the global economic crisis.
If implemented, the steel and aluminum tariffs would represent one of the most lopsidedly self-destructive U.S. trade policy decisions in recent memory. ... The tariffs will hurt the U.S. economy, cost U.S. jobs, and create inflationary pressure. By doing harm to U.S. allies, this action also undermines America's ability to attract support for an effective, multilateral strategy for dealing with China's unfair trade practices. ... [Mr. Trump] has given China a gift.