Trade Threats, Trade Wars: Bargaining, Retaliation, and American Coercive Diplomacy

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Trade Threats, Trade Wars: Bargaining, Retaliation, and American Coercive Diplomacy

By Ka Zeng
University of Michigan Press, 2004
324 pp. $57.50
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Democracies may not make physical war against one another, but they certainly engage in vigorous and even aggressive trade disputes. That is the thesis of political scientist Zeng, who observes that the most aggressive U.S. trade behavior, involving threats and occasionally trade retaliation, is directed at the European Union, Canada, and Japan-all democracies. China and other authoritarian countries, by comparison, are treated gently. The main explanation for this, Zeng finds, lies not in form of government: rich countries, all democracies, have similar patterns of comparative advantage and thus compete with one another, whereas poor countries have production and trade structures that are largely complementary to those of rich countries. Thus, proposals for trade retaliation against poor countries face resistance from U.S. sectors that benefit from trade with them. The book also includes a useful review of U.S. threats of trade retaliation during the past two decades, focusing especially on Japan and China.