Thomas J. Sargent, winner of the 2011 Nobel Prize in Economics, warned the United States about the danger caused by using "threats of trade restrictions and tariff increases" at the 2018 World Forum on Scientific and Technological Innovation in Beijing on Saturday.

While analyzing the history of U.S. trade policies, he said that almost every U.S. president from 1945 up till 2017 used "threats of trade restrictions and tariff increases as bargaining devices to get other countries to reduce their tariffs, trade restrictions and open up their markets."

Despite the current U.S. administration making much "noise," the actual signals are consistent with historical trends, said Sargent.

He considers the approach to have not always been successful as it entails "critical danger," where the U.S. "has made some big mistakes in negotiations."

According to Sargent, a "painful" mistake occurred when U.S. bilateral agreements which "excluded, and actually punished some oil producers in the Middle East" resulted in retaliation from those countries by forming the Organization of the Petroleum Exporting Countries (OPEC).

He calls the OPEC a successful cartel, which "raised oil prices twice in the 1970s" and "greatly damaged the U.S. economy."

The current U.S. trade policies, which have already begun to influence domestic producers and consumers, hurt other countries in the short term, but will hurt the U.S. itself more in the long term, said Sargent.

The American economist also said that U.S. producers who want to raise tariffs and keep out competitors are using economic theories to justify "having an easier life because of less competition."

"It's not the government's job to use tariffs to protect some inefficient producers at the cost of benefits to many other people in the society," he added.

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