Why the US will lose out through protectionism

By bashing China with protectionist policies, the US has nothing to gain - and plenty to lose. Economist Stephen Roach looks at how the outcome could, in effect, be a tax hike for the already beleaguered middle class.

Disinflation is at risk as the US Congress rushes headlong down the path of protectionism. The cross-border arbitrage of costs and pricing one of the unmistakable hallmarks of globalisation could well turn unfavourable if China bashers get their way. This could be a recipe for the dreaded stagflation scenario an awful outcome for financial markets and the functional equivalent of a tax hike on an already beleaguered American middle class.

Globalisation and the US: 'imported disinflation'

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