In an earlier Bulletin, I talked about the prospect that Trump’s trade war could cause serious de-globalization — an unwinding of multinational manufacturing value chains — and how the economic consequences look remarkably benign so far.

As J.W. Mason pointed out to me, standard economic analysis predicts that the fallout from even a huge tariff-induced drop in global trade would be surprisingly limited. Paul Krugman showed this in a lengthy blog post last month. He calculated that a full-blown global trade war would cause average tariff rates to soar to 40 percent, resulting in a 70 percent fall in global trade and bringing trade volumes all the way back to 1950s levels.