President Trump pursues a much more aggressive trade policy than he accepted in his first term, and his way of putting America at the forefront to guide him with the pretense of an extension of investigation and deliberation. It allows for free instincts.
Since taking office, Trump has threatened tariffs on his goods from potentially all his global trading partners. That includes proposals that imports from Canada, Mexico and China will tax more than $1.3 trillion. This is a multiple of many times the amount of trade that his tariffs were affected throughout his first term.
On Thursday, Trump proposed the most offensive and consequential action ever in a global redo of tariffs. This is a move that makes it clear that the president is not worried about hostility to his trading partners to draw concessions.
Trump ordered his advisors to calculate new tariff charges from other countries around the world based on the tariffs he charges to the United States.
The president's decision to devise what he calls “mutual tariffs” could shatter the commitments the United States has made internationally through the World Trade Organization. It would end decades that could curb the commitments that the US has made in general internationally and potentially lead to a new era of corporate uncertainty and the world trade war.
Some of Trump's threats amount to negotiating tactics, and do not come to fruition. He sees tariffs as a powerful and persuasive tool, and easily deploys them to other countries to force concessions, drug enforcement, and even territories. But the foundations of him and his supporters also view tariffs as an important policy of its own, as a way to leave the US, create jobs and reduce the trade deficit.
Trump has long held those views, but he was held back during his first term by enemies who saw value in more public trade. Some of the leading Republican politicians, and many advisers in the business community, argued that aggressive tariffs would hurt the stock market and the global economy.
This time, the president is adjacent to his advisers who support his combat trade agenda. They include Peter Navarro, one of Trump's top trade advisers and an avid trade skeptic who helps him develop his policies. Trump's nominees for Secretary of Commerce Howard Lutnick and Treasury Secretary Scott Bescent also publicly announced their support for the tariffs.
During Trump's first term, he took more than a year to impose tariffs. The president surprised the world in April 2017 by launching a national security investigation into the imports of tens of millions of dollars of steel and aluminum, including those from allies in Canada, Europe and Mexico. However, the investigation did not result in taxation until almost a year later.
In August 2017, the president published a survey on China's trade practices. This has been repeatedly called “unfair” by Trump. He ultimately imposed a sweep tariff on more than $300 billion in goods, but after his trade negotiators wrote a report and held a hearing, they did not begin to take effect until July 2018. did.
Trump is no longer willing to wait for a lengthy investigation before imposing tariffs. On his first day in office, the president commissioned a report on almost 20 trade topics from his advisors scheduled for April. However, since then, the president has announced several related trade measures without waiting to see what the report says.
On Thursday, Trump outlined plans for mutual tariffs, the subject of a planned study in April. The White House fact sheet highlighted some examples of products other countries tax at higher rates. This includes the 18% tariffs that Brazil places on ethanol, as opposed to the 2.5% tariffs that the US has.
“We don't want it to hurt other countries, but they've been using us for years and years, and they've charged US tariffs,” Trump said. said. “If they charge us, we charge them.”
That came a few days after he said that as of March 12, all countries would impose a 25% tariff on steel and aluminum, but there were no exclusions.
On February 1, Trump came on the brink of imposing tariffs on all goods (more than $900 billion in trade) from Canada and Mexico rather than concerns about illegal drugs and immigration.
He ultimately suspended these measures for a month after winning some modest concessions. However, he moved forward with an additional 10% tariff on all goods from China, products over $400 billion.
It remains to be seen whether other troops will ultimately discourage Trump. He was able to shake up by the stock market collapse. He has always seen it as a record of his performance, but on Thursday the market closed higher as investors shrugged Trump's announcement. Alternatively, complaints from businesses exposed to overseas retaliation and farmers who rely on export sales could encourage them to ease some of his plans.
But so far, Trump has shown little sympathy for the consequences of his rapid approach to global businesses and government. The threat of tariffs has caused foreign frustration, anger, and even boycotts. The European Union, China, Canada and Mexico are creating retaliation lists. This could hurt American farmers and other exporters.
Some domestic manufacturers have expressed support for the president's agenda. Kevin Dempsey, chief executive of the American Iron and Steel Institute, praised Trump's actions in a statement, describing it as “developing a comprehensive plan to restore equity in US trade relations.” .
But other companies say they have frozen investments and employment plans as they wait for the president to see if the resulting tariffs will move forward.
David French, executive vice president of the National Retail Federation, said that his group supported reducing trade barriers and imbalances, but the president's business is “large and will seriously destroy the supply chain.” “He said.
“It will likely bring higher prices to make American families hard work and erode household expenditure,” he said. He said indicators of consumer sentiment continue to decline, “indicating that consumers are wary of the uncertainty of the trade war.”
In a statement Tuesday, the US Chamber of Commerce on the European Union, which represents US companies in Europe, said tariffs on steel and aluminum would “have a vastly negative impact on employment, prosperity and security.” I said, of the Atlantic.”
Douglas Irwin, a trade historian at Dartmouth College, said the tariffs proposed by Trump were one of the steepest trade tax increases in American history and the largest since the Smootholy tariffs in the 1930s.
The tariffs the president threatened to impose on goods from Canada, Mexico and China “will constitute historical events in the chronicles of US trade policy,” he wrote.
Trade proposals, particularly those based on a list of seemingly subjective standards — are also the ultimate blow to an increasingly abused global trading system led by the World Trade Organization. In upcoming essays, Edward Alden and Jennifer Hillman, trade experts at the Council of Foreign Relations, called the president's proposal “a complete violation of the WTO's obligation to keep tariffs within negotiation restrictions.”
“That would be a bet on the rest of the WTO rules,” they said.
Still, Alden said he's not sure if Trump could follow with his heartfelt approach. There could be a fierce pushback from American businesses, and implementing so many different customs regulations worldwide is among other challenges when it becomes a “nightmare” for customs officials.
“I'm a bit comforted by the administration that I don't know what it's in,” Alden said.
