A Trade War Averted For Now

Anthony B. Kim / April 12, 2010

On April 6, last minute action by the Obama administration averted a near trade conflict with Brazil concerning the trade-distorting U.S. cotton subsidy programs. With the provisional deal, the U.S. avoided about $830 million in trade sanctions on over 100 American exports targeted by Brazil.  Those retaliatory tariffs would have gone into effect on April 7. More changes to U.S. cotton programs, which were declared illegal under the WTO’s 2008 ruling, have been pushed back to as early as 2012 when Congress will have to revisit the farm bill.

So, a trade war was avoided. More precisely, it has been delayed. Considerable murkiness lingers on the trade horizon, and not just with Brazil. As Friday’s WSJ editorial points out: (more…)