Trump’s Trade Policies — Continuing to Go Backward, More Unilateral, Confrontational and Unpredictable.

     The Trump administration continues to upset existing trade relations by imposing universal tariffs on steel and aluminum and by digging deeper into U.S. trade law by relying on older legislation.  In particular, by focusing on national security and foreign policy (for steel tariffs), on reciprocity for bilateral tariff increases (going back to an obscure 1930’s legal provision). and now refusing to prosecute violations of foreign corruption under the 1977 Foreign Corrupt Practices Act. These aggressive trade and international business policies mirror in many ways his foreign policy pronouncements (Greenland, Panama Canal, Gaza) and demonstrates his disregard of U.S. and international trade law.

Tariffs have never been universally low, reciprocal, or predictable. The current multilateral trading system, first put into place in 1947 and expanded in 1995 with the creation of the World Trade Organization (WTO), accomplished a lot in lowering tariffs among member countries and establishing a system of adjudication and enforcement that (most of the time) kept tariffs from spiraling back up over many decades. But it has had much less success in bringing all tariffs down. The last substantial tariff cuts now date back nearly 30 years, to the WTO Information Technology Agreement. This failure is one factor in generating grievances over the lack of reciprocity in tariff levels between nations. In fact, some of the large emerging economies that benefit most from exports to the United States continue to maintain high tariff rates. Then it should not be surprising that a reckoning with this imbalance might be overdue. Reciprocity has been a longstanding policy and tradition in American trade politics …. current average tariff levels continue to vary substantially among WTO members …. The good news is that tariffs remain at generally historic lows. However, the lowest tariffs are increasingly reserved for countries in preferential trade agreements …. …. The United States under both Trump and Biden justified higher tariffs exceeding WTO commitments by arguing that national security and dependable supply chains were at stake, which triggered complaints over whether such moves were legal in the judgment of the WTO. The complaints, however, do not take into account the fact that other members, such as India, Indonesia, and South Africa, can raise their tariffs without violating WTO rules because their bound commitments, negotiated decades ago and justified as necessary to reflect their developing economy status.” “Reciprocal Tariffs and WTO.” Hinrich (2.11.25).

President Trump announced sweeping tariffs on foreign steel and aluminum re-upping a policy from his first term. The president signed two official proclamations that would impose a 25 percent tariff on steel and aluminum from all countries (universal tariffs) …. Trump said that he also planned to move forward this week with so-called reciprocal tariffs, which would raise certain U.S. tariff rates to match those of foreign countries …. The largest supplier of steel to the United States in 2024 was Canada, followed by Brazil, Mexico, South Korea and Vietnam …. In his first term, Mr. Trump levied tariffs on foreign steel and aluminum using a national security provision called Section 232 of the Trade Expansion Act …. The United States imports very little steel or aluminum directly from China, since Chinese exports have long been blocked by a variety of anti-dumping and anti-subsidy tariffs. But some argue that China’s excess steel production is still flooding other markets and pushing down global prices …. Mexico, Canada and the European Union have all drawn up lists of American products they could strike with their own levies in response to U.S. measures.” “Trump’s Tariffs on Steel and Aluminum.” New York Times (2.11.25).

“Trump has imposed 25 per cent tariffs on all steel and aluminum imports from March ….  widening his global trade conflicts. Retaliation threats have started to roll in, with the EU …. While Mexico and Canada were given a 30-day reprieve from blanket levies earlier this month, they’re right back in the US president’s crosshairs. In 2023, the two nations were, along with China, the biggest exporters of steel and aluminum products to the US. These tariffs could also potentially hit countries such as Brazil, Germany and South Korea. “Trump’s Tariffs on Steel Broadens Atack on Global Trade.” Financial Times (2.10.25).

“The steel and aluminum tariffs are expected to go into effect March 12, leaving some time for possible negotiation …. For Europe, the steel and aluminum tariffs are only the first shoe to drop. Trump has made it clear in recent days that he could announce more wide-ranging “reciprocal” tariffs.” “EU Response to Trump’s Tariffs.” New York Times (2.12.25).

“Trump could announce his reciprocal tariff plan soon …. Trump said that he planned to slap reciprocal tariffs on “every country” that imposes import duties on the U.S. “Very simply it’s if they charge us, we charge them,” “Reciprocal Tariffs Coming.” CNBC (2.12.25).

“The ambitions veiled in this trade policy document are far-reaching. It provides the clearest indication of a coordinated game plan as the Trump administration searches for the best legal weapons for its desired trade policies …. Disguised in bureaucratic language, Trump 2.0’s first presidential memo promises major adjustments to US trade policy which will have global consequences. Tariffs are a clear and visible danger, but this memo on Day One provides evidence of a much larger trade strategy in the pipeline …. The memo also declares that there are both economic and national security risks that come from these goods deficits …. The America First trade document goes on to urge government agencies to use any and all existing legal avenues (including older, often obscure provisions) to address topics such as unfair trade practices; currency manipulation; application of trade rules and remedies like anti-dumping and countervailing duties; export controls; determination of losses from counterfeit and illicit trade including through provisions such as de minimis; adjustment of imports that threaten the national security of the United States (including steel and aluminum); and inbound and outbound investment rules …. It is striking that a memo about trade policy includes so many different regulatory agencies across the US government. For example, in addition to Commerce, USTR, Treasury, and State, the document tasks the Director of the Office of Management and Budget to assess foreign government financial contributions and subsidies …. But tariffs are a centerpiece of Trump’s approach, including the use of tariffs to support fiscal balance, serve as a method of threat and punishment against all and sundry in the rest of the world, act as a bargaining chip for different types of negotiation, foster domestic manufacturing, or be a symbol of America First power.” “Trump’s ‘America First Trade Memo’.” Hinrich (2.13.25).

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About Stuart Malawer

Distinguished Service Professor of Law & International Trade at George Mason University (Schar School of Public Policy).
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