In pursuing the aggressive overhaul of several trade agreements, Trump has risked retaliation from many countries, raising tensions and hostility. In quickly resorting to the introduction of tariffs, the US risks becoming a less desirable trading partner for other nations. Unilateral tariffs imposed by the US are often followed by retaliatory tariffs, negatively impacting US exports and workers in export industries. The United Steelworkers Union complained that the “chaos” surrounding tariffs on Canadian steel is undermining business planning.
The costs of tariffs are also largely borne by firms and consumers rather than foreign exporters as imports become more expensive - JP Morgan analysis suggests tariffs on China could cost the average American household up to $1,000 each year.
The trade war with China has cost 0.3% of real GDP and nearly 300,000 jobs, according to Moody’s.
The new trade deals have not improved the American trade deficit as Trump had hoped.
The Trump administration are exaggerating the achievements of the trade deals reached. Many of the terms of the new deal with Canada and Mexico are the same as under the NAFTA agreement, and labelling the deal with China ‘phase one’ is a clever ploy to distract from the fact that the deal falls short of the ambitions of Trump’s government.