The global trade status quo is shifting. Will the U.S. be left out?

Overview

This episode explores the shifting dynamics of global trade as countries increasingly bypass the U.S. in forming economic alliances. It also delves into the implications of U.S. protectionist policies, the housing market's regional disparities, the Supreme Court's upcoming case on Federal Reserve governance, and a discussion on reparations for Black Americans.

Notable Quotes

- We are in the midst of a rupture, not a transition. The old order is not coming back. – Canadian Prime Minister Mark Carney, on the changing global economic landscape.

- Once the dollar ceases to be the dominant sole global trading and reserve currency, a lot of things Americans have taken for granted start to go away. – Doug Rediker, Brookings Institution.

- We paid reparations for lynching Italians in Louisiana, but not Black Americans. – Dorothy Brown, on the historical inequities in U.S. reparations policies.

🌍 Shifting Global Trade Alliances

- Countries like Canada, the EU, and South America are forming trade agreements independent of U.S. influence, signaling a realignment in global trade.

- Elizabeth Trovall highlights how U.S. protectionism under President Trump has led other nations to view the U.S. as an unreliable partner.

- Bill Reinsch notes that while global trade is increasing, it is rearranging, with countries moving forward without the U.S.

- The U.S. risks long-term economic consequences, including reduced export opportunities and potential challenges to the dollar's dominance as the global reserve currency.

⚖️ Supreme Court and Federal Reserve Independence

- The Supreme Court is set to hear a case on President Trump's attempt to fire Fed Governor Lisa Cook, raising questions about the limits of presidential power.

- Leah Litman, a law professor, explains that the case hinges on whether the president has good cause to remove a Fed governor, a move that could undermine the Fed's independence.

- The court's decision could set a precedent for future executive actions regarding independent agencies.

🏠 Housing Market Imbalances

- December saw a buyer's market nationally, with sellers outnumbering buyers by 47%, according to Redfin.

- In regions like the Sun Belt, high mortgage rates and economic uncertainty are causing buyers to hesitate, leading to longer selling times and downward pressure on prices.

- Experts like Chen Zhao and Vaika O'Grady describe this as a return to normalcy after years of unsustainable market frenzy.

📚 Reparations and Historical Reckoning

- Dorothy Brown, author of Getting to Reparations, advocates for a federal commission to study reparations for Black Americans, citing historical precedents like payments to Japanese Americans and tribal nations.

- She emphasizes the need to educate Americans on the systemic harm inflicted on Black communities post-slavery and argues that understanding this history can shift public opinion.

- Brown highlights the emotional toll of researching these injustices but underscores the importance of addressing them for societal progress.

📉 Economic Volatility and Market Trends

- Global markets experienced significant volatility, with major U.S. indices like the Dow and Nasdaq seeing sharp declines.

- Bond yields rose, reflecting concerns over U.S. fiscal stability, as highlighted by a Danish pension fund's decision to divest from U.S. Treasury bonds.

- The episode underscores the interconnectedness of global economic trends and domestic policy decisions.