The Illusion of Free Trade
This is the title of the recent analysis from the Geopolitical Futures team. With the ongoing media debate about the risks posed by the US to free trade, GF pointed out that even with zero tariffs, free trade cannot be achieved. States use a wide range of vehicles to restrict trade and defend their interests. These include ‘compliance’ regulations, deliberate delays in processing certain goods through customs, antitrust regulations to restrict large companies, etc. Such obstacles may not stop the flow of goods, but they could massively escalate exporters' costs. The exporting countries use a different set of tricks to abuse the system by e.g. enacting looser labour laws or by offering outright export subsidies. Bottom line, increases in customs duties are just a one piece of the puzzle in international trade.