Trump tariffs

Understanding the Trump Tariffs: A Brief Overview

The Trump tariffs were a series of protectionist trade measures aimed at safeguarding American industries and reducing the trade deficit. These tariffs targeted Chinese imports, as part of his ‘America First’ economic policy. But what exactly did these tariffs entail? And how did they impact the global economy?

Initial Moves: Solar Panels and Washing Machines

In January 2018, Trump imposed tariffs on solar panels and washing machines, setting a precedent for future actions. These initial moves were seen as a way to protect domestic industries from foreign competition. But why did he choose these specific products? Was it just about protecting American jobs or was there more at play?

Steel and Aluminum: The Big Picture

‘Is the imposition of 25% tariffs on steel and 10% on aluminum from most countries a mere coincidence?’ In March 2018, Trump announced these tariffs, citing national security concerns. However, economists argue that currency declines were due to global market forces rather than devaluation. The legality of these tariffs is also questionable, with powers shifting towards the president since the Trading with the Enemy Act in 1917 and the International Emergency Economic Powers Act in 1977.

Retaliatory Measures: A Global Response

The US imposed a 25% steel tariff on most countries, except for four that have permanent exemptions. This move sparked retaliatory tariffs from trading partners like China and Canada. In June 2018, India planned to recoup trade penalties of $241 million on $1.2 billion worth of Indian steel and aluminum; Canada imposed matching retaliatory tariffs on July 1, 2018. China implemented retaliatory tariffs equivalent to the $34 billion tariff imposed on it by the US.

North America: A More Successful Negotiation

‘Could the relatively successful negotiations with Mexico and Canada be a sign of better trade relations?’ Tariff negotiations in North America were more successful, with the U.S. lifting the steel and aluminum tariffs on Canada and Mexico on May 20, 2019. However, Trump unilaterally announced his intention to impose a five percent tariff on all imports from Mexico beginning on June 10. The move was seen as threatening the ratification of the USMCA.

Domestic Reactions: A Divided Front

The reactions from elected officials varied by region rather than ideology. While some conservatives and Republicans criticized the tariffs, others supported them, particularly in Rust Belt states. The AFL-CIO praised Trump for the tariffs, while Democratic Senator Sherrod Brown supported the action to help ‘steel plants across Ohio.’ Many congressional Republicans expressed fear about the impact of tariffs on the economy and international relations.

China: A Complex Relationship

‘How did China respond to the US’s initial announcement of retaliatory tariffs?’ On March 22, 2018, Trump signed a memorandum directing $50 billion in tariffs on Chinese goods. China responded with tariffs on 128 US products, including a 15% duty on most and a 25% tariff on eight others. The US Trade Representative’s office published an initial list of Chinese goods subject to tariffs. China then announced additional tariffs of 25% on 106 products, including automobiles and soybeans.

Global Impact: A Widening Rift

The trade dispute between the US and China led to a series of retaliatory measures. The EU filed a WTO challenge against the U.S. on June 1, once the tariffs took effect. Retaliatory tariffs from the European Union took effect on June 22, 2018, imposing tariffs on $3 billion worth of US goods, including steel and aluminum, agricultural products, and clothing. The EU retaliated against the US after the US imposed tariffs on Airbus subsidies.

Conclusion: A Costly Experiment

The Trump tariffs aimed to lower America’s trade deficit but ultimately resulted in significant economic harm. Tariffs reduced employment in the American manufacturing sector, increased consumer prices, and caused real income losses. The study found that ‘retaliatory tariffs resulted in a 9.9% decline in U.S. exports within products.’ Workers in heavily Republican counties suffered the most, as retaliatory tariffs focused on agricultural products.

The ongoing trade dispute between the US and China led to a series of retaliatory measures, with the EU imposing additional tariffs in 2019. However, under President Joe Biden, the US and EU announced that they would lift tariffs on steel and aluminum, replacing them with bilateral tariff-rate quotas. European tariffs on American metal and iconic exports were also lifted, while further retaliatory tariffs were forestalled.