Donald Trump’s fiery critique of America’s top trading partners, with whom the country runs a hefty $500 billion trade deficit, comes as little surprise. Since 2016, both Trump and Biden have shaken up traditional trade practices. Their approaches, however, diverged significantly: Biden pushed for systemic reform, while Trump leaned heavily on rhetoric and theatrics. Both administrations have faced their share of criticism for raising costs due to tariffs and industrial policies, but the real culprit behind rising prices was primarily global events.
Trump’s penchant for tariffs is closely linked to his knack for wielding them without needing Congressional approval, often citing national security. This might explain why he recently declared plans to slap a 25% tariff on all Canadian and Mexican goods and an additional 10% on imports from China unless these nations tackle alleged issues of illegal immigration and fentanyl trafficking. For Trump, tariffs are more than just policy tools—they are strategic bargaining chips. By threatening their imposition, he signals his readiness to negotiate, albeit strictly on his terms.
Trump’s trade strategies reshaped dynamics with Mexico and Canada, setting the stage for a 2026 review of the 2019 agreement made with these neighboring countries. However, his tactics stumbled when it came to China. Despite the hefty $112 billion in tariffs imposed by his first administration and threats of another $500 billion, Beijing only negotiated a 2020 deal that fell short post-COVID, leaving Biden to pick up the pieces.
Trade is about balancing sacrifices for benefits. The upside of cheaper consumer goods could result in fewer domestic jobs or lower wages in certain sectors, and an uptick in imports might dent local manufacturing. Running a trade deficit isn’t inherently bad, but it demands active policies to prevent adverse impacts from being too regionally concentrated. For decades, the neoliberal economic order painted a picture of a borderless world where goods and services flowed with minimal barriers, and “protectionism” was virtually taboo. Yet, since the global financial crash, skepticism toward globalization has grown.
A heightened focus on justice, sustainability, and improved working conditions is reshaping trade priorities worldwide. There’s been a noticeable shift towards producing goods closer to home, either through bolstered domestic manufacturing or developing nearby supply chains. However, wealthy countries, with the US at the helm, often resist affording poorer nations the leeway to modernize, all while claiming exceptions to the very rules they champion for others. During the pandemic, the US prioritized the profits of its pharmaceutical industry over global vaccine access, blocking crucial doses from reaching developing nations.
The downturn of globalization began well before Trump, with his protectionist stance echoing, rather than instigating, this trend. The shift away from global interdependence is likely to continue, driven by geopolitical unease, post-pandemic supply chain adjustments, and calls for fairer trade practices. Trump’s policies, nevertheless, add another layer of uncertainty to an already unpredictable world. His distrust of mutually beneficial agreements complicates the efforts of policymakers striving to balance national interests with the need for global collaboration.
