Trade impacts
The former administration of President Donald Trump imposed $360 billion in tariffs that drastically changed the landscape of global trade. This trend hit particularly hard for the electronics and manufacturing industries. Set against the backdrop of a trade war with multiple countries, most prominently China, this newest trade policy was born. It featured a new 25% tariff on a broad swath of imported products. These unilateral measures forced trading partners to the negotiation table to forge new agreements. They inspired retaliatory action from the countries on the receiving end.
In 2018, the Trump administration enacted tariffs pursuant to Section 301 of the Trade Act of 1974. These tariffs were carefully chosen to hurt industries such as technology and manufacturing. The tariffs were facilitated by lobbying from the domestic steel industry, specifically targeting imports from China, Canada, and Mexico. Their intent was to redress perceived trade imbalances and protect U.S. national security interests. Despite this stated intention, the implementation of these tariffs has resulted in widespread confusion and concern among U.S. businesses and consumers.
This has been particularly problematic for companies, like Apple, that have experienced the tariffs’ effects very directly. Increased costs of manufacturing and importing goods have in turn led all manner of companies to raise prices on consumers. Though in many ways it’s making life more difficult for businesses and customers alike. The overwhelming costs have forced a large portion of manufacturers to rethink their manufacturing tactics under these fiscal weight.
Tariff increases and retaliation by dozens of countries against the United States. These innovations have led to a seismic shift in global trade. Almost immediately, countries affected by U.S. tariffs retaliated with their own tariffs. This led to a complicated patchwork of trade barriers that critically collapsed the channels of international trade flows. This tit-for-tat approach has caused instability in the market, making it difficult for investors to make decisions and businesses to plan accordingly.
The Trump administration argued that these tariffs were necessary to protect U.S. interests in any future trade negotiations that might occur on the global stage. Opponents countered that the burden on American consumers and businesses cancelled out any positive impact that these policies purportedly had. With escalating costs due to tariffs, many have raised concerns about the long-term efficacy of these bullish trade maneuvers.
The trade environment is certainly more fluid today than during the Trump presidency. It is not even clear how these tariffs will affect future economic relations between the United States and its trading partners. The legacy of this trade war serves as a powerful reminder of the fine line that exists between protecting domestic interests and promoting international collaboration.