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International Trade


Political Economy


Trade

Recorded at the PSE-CEPR Policy Forum, Paris School of Economics, June 2026. In 1941 the United States banned oil exports to Japan, to punish aggression without fighting a war. Historians now argue the embargo did the opposite, and hastened Japan’s entry into the war. Isabelle Méjean (Sciences Po, CEPR) calls this “The safety paradox”. Trade between rivals makes war more expensive. Cut that trade to protect your interests, and you make conflict cheaper, for your rival as well as for you. In a new VoxTalk she talks to Tim Phillips about economic coercion, decoupling, and why Europe should treat its trade agreements as insurance. Méjean and her co-authors simulated the US decoupling from China. Raising tariffs by 20 percentage points, roughly what the first Trump administration did, raises the probability of war by 2%, she estimates. That sounds small until you consider what a war between the US and China would mean.

Last Updated 22 Jul 2026