Why Europe must embrace tariffs

In a recent paper, Sander Tordoir and Brad Setser point out that Chinese export outperformance has been matched by Euro area underperformance. In industries where China’s export market share has risen over the past few years, German output has been particularly weak. 

Tordoir and Setser themselves suggest a US-style European “Section 301” power, which would allow the EU to investigate and lash out against China’s “economy-wide distortions”. They also proposed that any revenue from new tariffs could go to trade-war victims.