Business with the World
How far has an "America First" trade policy gotten us, and how far can it go?
Prior to President Donald Trump, international trade was not typically a central issue in a U.S. presidential election. But trade is central to Trump’s economic approach. Under his leadership, America has radically shifted
its trade priorities, moving from a history of negotiating reciprocal agreements to reduce tariffs and non-tariff barriers to "America First" deals.
Rejecting the view that reciprocity leads to mutual gains, President Trump has instead wielded access to the U.S. market as a cudgel to force concessions made in earlier deals, while disarming the multilateral system designed to referee a rules-based
President Trump has instead wielded access to the U.S. market as a cudgel.
The Trump administration has shown little interest in advancing the World Trade Organization (WTO), which embodies the ground rules for global trade. President Trump prefers bilateral negotiations, which allow the U.S. to seek "better deals"—those that
open foreign markets to U.S. exporters while reducing access to the American market. Trump’s approach is a fundamental change in how the world’s leading economy approaches commercial relations between countries.
Trump has been successful in gaining some modest rollbacks of previous U.S. commitments. For example, the newly revised U.S.-Korea agreement slows down promised reductions in U.S. tariffs on pickup trucks. Negotiations with individual trading partners
also have led to useful updating, such as new rules for digital trade.
Whether the U.S. continues its confrontational approach to trade relations depends on the election. Democrats are likely to renew support for the WTO even as they seek reforms to its procedures. They also are eager to improve frayed relations with European
and Asian allies. Like the current administration, however, they promise to maintain pressure on China to prevent intellectual property theft, reduce state subsidies, and further open markets to U.S. companies. Thus, trade policy is likely to stay
in the headlines, no matter what happens in November.
Mary Lovely is a Maxwell Professor of Teaching Excellence in economics and recent co-editor of the China Economic Review. Her research focuses on U.S. trade policy and Chinese economic development. Of late, she has been among the nation’s most quoted experts on Sino-American trade.