Whereas the European Union is only now putting in place an economic security strategy to cope with the vagaries of a turbulent international context, the United States wasted no time in protecting its economy. Since 2022 and the adoption of the Inflation Reduction Act (IRA), the American administration has been supporting its domestic economy through measures targeted at both consumers and businesses — measures which, as some commentators see it, attest to quite a protectionist turn. What is going on here? What do these measures consist in and what might their impact be on the world’s leading economic power?
Two months out from the U.S. presidential election, which has the spectre of a returning Donald Trump hovering over it, Antoine Bouët examines the complex mechanics of the U.S. economic support package implemented by Joe Biden. He analyses the impacts on investment and on combatting climate change, both in macroeconomic and environmental terms, distinguishing between the part they have actually played and the mere ‘deadweight’ effects. Lastly, and more broadly, he looks at the economic prospects for the country at the global level, particularly if a return to power of Donald Trump entails increased protectionism: two scenarios modelled by the CEPII provide an insight into the consequences of such a return. As Bouët shows in that exercise, measures like the IRA have only a relatively minor macroeconomic impact by comparison with the risks that would ensue from a ‘Trumpist’ revival of protectionism.
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