It gained new impetus in the 1980s and had a golden age in the period 1990-2008, when total trade in goods and services increased from 39% to 61% of world GDP. The process of trade integration started after the Second World War. Trade integration has slowed over the last decade. It discusses the macroeconomic implications of the recent surge in protectionism and evaluates the possible effects that an escalation in trade tensions could have on the global economy and the euro area. Against this backdrop, this article reviews the changes in the trade policy landscape over the past decade. The complexity of intertwined international production chains could also magnify the impact. Uncertainty related to protectionism is weighing on economic sentiment and it may raise further, potentially eroding confidence and affecting the euro area and the global economy more significantly. However, large negative effects could materialise if trade tensions were to escalate further. The impact of the measures implemented so far on the global and euro area economic outlooks is expected to remain contained. Tensions rose over the summer and, while these have been defused on some fronts, the risk of further escalation remains material. The risk of a trade war came sharply into focus in 2018, as protectionist threats by the US Administration and its trading partners were followed by concrete actions. ![]() Published as part of the ECB Economic Bulletin, Issue 3/2019. Prepared by Vanessa Gunnella and Lucia Quaglietti ![]() The economic implications of rising protectionism: a euro area and global perspective
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