Why Has U.S. Trade Policy Changed Under The Trump Administration?


Since WWII, the U.S. trade policy has sought to liberalise markets by reducing trade and investment barriers through agreements and negotiations. Its key components are trade rules-setting, liberalisation and enforcement, export promotion, and controls, customs, trade remedies, trade adjustment, trade preferences, and investment. This includes fostering an open and non-discriminatory rules-based trading system, enforcing trade commitments and laws, supporting economic growth, and offering relief to U.S. firms and workers from import competition, and “unfair” foreign trade practices. However, President Trump’s “America First” policy increasingly undermines international trade law. 

The reason for this change is based on economic interest. President Trump is more interested in making “deals” than following international trade law. This is why his trade policy concentrates on the national interests of the U.S and is in sync with the U.S national security strategy. In order for President Trump to achieve his goals, he chose to focus on quid-pro-quo and bilateral solutions rather than multinational cooperation. His main interest is to increase U.S. exports and diminish imports. It is combat high consumption and low savings, which has resulted in a budget deficit. It is related to institutions, the stable sets of rules, routines, and practices that aggregate conflicting interests into outcomes. There are different types of institutions that fit into this definition such as economic structure, electoral rules and political structure. Political structure in particular is analysed based on comparing strong and weak states, democratic and authoritarian states, and veto points. Institutions shape interests, because institutions constitute actors’ interests. 

President Trump has withdrawn the U.S. from the Trans-Pacific Partnership (TPPA), renegotiated trade agreements with Mexico and Canada (NAFTA), and South Korea (KORUS), and blocked the appointment of members to the Appellate Body of the World Trade Organisation. In addition, he has also put a 25% tariff on steel and a 10% tariff aluminium imports as of March 1, 2018. The agreements mentioned are the products of President Trump’s transaction trade approach. This approach aims to modify America’s economic power to force other countries to purchase more American made products. His “America First ” policy is built upon shifting global supply chains, seeing that he had intentions to encourage multinational companies to move operations to the U.S. It is an effort to lower the trade deficit and boost economic growth. Currently, increases in government spending and a big tax cut have temporarily increased economic growth and consumption.

When President Trump renegotiated the trade agreements with Mexico, Canada, and South Korea, he aimed for what he perceives as fairer and better balanced trade agreements in order to promote the creation of U.S. jobs and prosperity. His policies will create winners and losers even if all of society is better off. Their outcomes of these results are ultimately the product of struggles between competing interests.