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The Trump tariffs are a series of United States
tariff A tariff is a tax imposed by the government of a country or by a supranational union on imports or exports of goods. Besides being a source of revenue for the government, import duties can also be a form of regulation of foreign trade and po ...
s imposed during the
presidency A presidency is an administration or the executive, the collective administrative and governmental entity that exists around an office of president of a state or nation. Although often the executive branch of government, and often personified by ...
of Donald Trump as part of his " America First" economic policy to reduce the United States
trade deficit The balance of trade, commercial balance, or net exports (sometimes symbolized as NX), is the difference between the monetary value of a nation's exports and imports over a certain time period. Sometimes a distinction is made between a balanc ...
by shifting American trade policy from multilateral
free trade agreement A free-trade agreement (FTA) or treaty is an agreement according to international law to form a free-trade area between the cooperating states. There are two types of trade agreements: bilateral and multilateral. Bilateral trade agreements occu ...
s to bilateral trade deals. In January 2018, Trump imposed tariffs on solar panels and washing machines of 30 to 50 percent. In March 2018, he imposed tariffs on steel (25%) and aluminum (10%) from most countries, which, according to Morgan Stanley, covered an estimated 4.1 percent of U.S. imports. In June 2018, this was extended to the European Union, Canada, and Mexico. The Trump administration separately set and escalated tariffs on goods imported from China, leading to a trade war. The tariffs angered trading partners, who implemented retaliatory tariffs on U.S. goods. In June 2018, India planned to recoup trade penalties of $241 million on $1.2 billion worth of Indian steel and aluminum, but attempted talks delayed these until June 2019 when India imposed retaliatory tariffs on $240 million worth of U.S. goods. Canada imposed matching retaliatory tariffs on July 1, 2018.Kate Rooney
Canada makes retaliatory tariffs official: 'We will not back down'
, CNBC (June 29, 2018).
Daniel Wolfe
The full list of 229 US products targeted by Canada's retaliatory tariffs
, ''Quartz'' (June 29, 2018).
China implemented retaliatory tariffs equivalent to the $34 billion tariff imposed on it by the U.S. In July 2018, the Trump administration announced it would use a Great Depression-era program, the
Commodity Credit Corporation The Commodity Credit Corporation (CCC) is a wholly owned United States government corporation that was created in 1933 to "stabilize, support, and protect farm income and prices" (federally chartered by the CCC Charter Act of 1948 (P.L. 80-806) ...
(CCC), to pay farmers up to $12 billion, increasing the aid to $28 billion in May 2019. The USDA estimated that aid payments constituted more one than one-third of total farm income in 2019 and 2020. Tariff negotiations in North America were relatively more successful, with the U.S. lifting the steel and aluminum tariffs on Canada and Mexico on May 20, 2019, joining Australia and
Argentina Argentina (), officially the Argentine Republic ( es, link=no, República Argentina), is a country in the southern half of South America. Argentina covers an area of , making it the second-largest country in South America after Brazil, th ...
in being the only nations exempted from the regulations. However, on May 30, Trump unilaterally announced his intention to impose a five percent tariff on all imports from Mexico beginning on June 10, with tariffs increasing to ten percent on July1, and by another five percent each month for three months, "until such time as illegal migrants coming through Mexico, and into our Country, STOP," adding illegal immigration as a condition for U.S.-Mexico tariff negotiations. The move was seen as threatening the ratification of the United States–Mexico–Canada Agreement (USMCA), the North American trade deal set to replace the North American Free Trade Agreement (NAFTA). The tariffs were averted on June 7 after negotiations. A May 2019 analysis conducted by CNBC found Trump's tariffs are equivalent to one of the largest tax increases in the U.S. in decades. Studies have found that Trump's tariffs reduced
real income Real income is the income of individuals or nations after adjusting for inflation. It is calculated by dividing nominal income by the price level. Real variables such as real income and real GDP are variables that are measured in physical units, ...
in the United States, as well as adversely affecting U.S. GDP. Some studies also concluded that the tariffs adversely affected Republican candidates in elections.


Background

Trump adopted his current views on trade issues in the 1980s, saying Japan and other nations were taking advantage of the United States. During the
2016 presidential campaign This national electoral calendar for 2016 lists the national/ federal elections held in 2016 in all sovereign states and their dependent territories. By-elections are excluded, though national referendums are included. January *7 January: Kiri ...
, Trump repeatedly favored policy proposals that renegotiate trade agreements for the United States. During a meeting with the New York Times Editorial Board in January 2016, Trump said he would tax Chinese imports into the United States by 45%. Trump frequently criticized the North American Free Trade Agreement calling it "the worst trade deal the U.S. has ever signed". He also called
Trans-Pacific Partnership The Trans-Pacific Partnership (TPP), or Trans-Pacific Partnership Agreement, was a highly contested proposed trade agreement between 12 Pacific Rim economies, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Pe ...
"the death blow for American manufacturing" and said it would "put the interests of foreign countries above our own".


Policy

On November 21, 2016, in a video message, Trump introduced an economic strategy of "putting America first", saying he would negotiate "fair, bilateral trade deals that bring jobs and industry back on to American shores". On January 23, 2017, three days after becoming president, Trump withdrew the United States from the politically divisive
Trans-Pacific Partnership The Trans-Pacific Partnership (TPP), or Trans-Pacific Partnership Agreement, was a highly contested proposed trade agreement between 12 Pacific Rim economies, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Pe ...
believing the agreement would "undermine" the U.S. economy and sovereignty. Trump has also indicated a desire to end the North American Free Trade Agreement with Canada and Mexico. His administration has renegotiated the terms of the agreement. Trump had threatened to withdraw from it if negotiations fail. He has specifically criticized the
Ford Motor Co. Ford Motor Company (commonly known as Ford) is an American multinational automobile manufacturer headquartered in Dearborn, Michigan, United States. It was founded by Henry Ford and incorporated on June 16, 1903. The company sells automobile ...
,
Carrier Corporation Carrier Global Corporation is an American multinational heating, ventilation, and air conditioning (HVAC), refrigeration, and fire and security equipment corporation based in Palm Beach Gardens, Florida. Carrier was founded in 1915 as an indepen ...
, and
Mondelez International Mondelez International, Inc. ( ), often styled Mondelēz, is an American multinational confectionery, food, holding and beverage and snack food company based in Chicago. Mondelez has an annual revenue of about $26 billion and operates in ...
for having operations based in Mexico. In August 2015, in response to Oreo maker Mondelez International's announcement that it would move manufacturing to Mexico, Trump said he would boycott Oreos. The new deal increases the percentage of parts and manufacturing that must be done in North America for domestic automobiles, sets a minimum wage for some workers on auto parts, and expands access for U.S. dairy sales to Canada. Similar to his approach to trade deals, Trump also pledged, as part of the Contract with the American Voter, to impose tariffs to discourage companies from laying off workers or relocating to other countries, through an "End the Offshoring Act". No such act has been introduced in
Congress A congress is a formal meeting of the representatives of different countries, constituent states, organizations, trade unions, political parties, or other groups. The term originated in Late Middle English to denote an encounter (meeting of ...
, but Trump has moved to impose tariffs on solar panels, washing machines, steel, and aluminum. The enforcement of the tariffs falls primarily within the purview of the Department of Commerce and
Office of the United States Trade Representative The Office of the United States Trade Representative (USTR) is an agency of the United States federal government responsible for developing and promoting American trade policy. Part of the Executive Office of the President, it is headed by the ...
. Trump has repeatedly promised to lower America's trade deficit, and has argued for a renegotiation of trade deals and imposition of tariffs to that end. These efforts notwithstanding, during 2018 the trade deficit continued to increase. In November 2018, Trump argued that the tariffs enriched the United States. He said the United States was gaining "Billions of Dollars" from "Tariffs being charged to China". He added, "If companies don't want to pay Tariffs, build in the U.S.A. Otherwise, let's just make our Country richer than ever before!" Fact-checkers and economists described the assertions made by Trump as false, with the Associated Press writing "Almost all economists say the president is wrong. That's because tariffs are taxes on imports. They can cause higher prices, reduce trade among countries and hurt overall economic growth as a result."


Legality

Article1, Section8 of the
Constitution A constitution is the aggregate of fundamental principles or established precedents that constitute the legal basis of a polity, organisation or other type of entity and commonly determine how that entity is to be governed. When these princi ...
: ''"Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises."'' But Congress has repeatedly shifted its powers regarding tariffs to the president. Beginning in 1917 with the Trading with the Enemy Act of 1917 the president can impose any tariff while the nation is at war. The affected trade does not have to be connected to the ongoing war. Since 1974 the
Trade Act of 1974 The Trade Act of 1974 (, codified at ) was passed to help industry in the United States become more competitive or phase workers into other industries or occupations. Fast track authority The Trade Act of 1974 created fast track authority fo ...
allows the president to impose a 15% tariff for 150 days if there is "an adverse impact on national security from imports." After 150 days the tariff expires unless extended by Congress. In 1977 the International Emergency Economic Powers Act shifted powers even more towards the White House. The Trump administration claims that it gives the President the authority to raise tariffs without any limits during a national emergency of any kind. Legal scholars disagree because the IEEPA does not mention tariffs at all and transfers no authority of tariffs towards the President.


Enacted


Solar panels

On January 23, 2018, news outlets announced that Trump had imposed tariffs on solar panels produced outside the United States. The tariffs initially start at 30% and will gradually fall to 15% in four years. The first 2.5 gigawatts of solar cells imported each year will be exempted from the tariff. China is currently the world leader in solar panel manufacture, and has decried the tariffs.
Zhong Shan Zhong Shan (; born October 1955) is a Chinese politician and business executive, who served as the Commerce Minister of the People's Republic of China from February 2017 to December 2020. Career Zhong Shan was born in Shangyu, Zhejiang, an ...
, the Chinese Ministry of Commerce said, "With regard to the wrong measures taken by the United States, China will work with other W.T.O. members to resolutely defend our legitimate interests." In 2022, President Biden extended the now 15% tariff on solar panels another four years.


Washing machines

On January 23, 2018, in conjunction with the tariffs placed on solar panels, the Office of the U.S. Trade Representative announced tariffs on washing machines. According to the U.S. International Trade Commission (ITC), imports of large residential washers increased "steadily" from 2012 to 2016, and domestic producers' financial performance "declined precipitously". In the first year, the tariffs start at 20% for the first 1.2 million units of imported finished washers, and all subsequent washers within that year will have a 50% tariff. By the third year initial tariff will go down to 16–40%, following the same pattern. The tariffs came after a petition was filed by
Whirlpool A whirlpool is a body of rotating water produced by opposing currents or a current running into an obstacle. Small whirlpools form when a bath or a sink is draining. More powerful ones formed in seas or oceans may be called maelstroms ( ). ''Vo ...
, a U.S.-based washing machine manufacturer facing tough competition from
LG Electronics LG Electronics Inc. () is a South Korean multinational electronics company headquartered in Yeouido-dong, Seoul, South Korea. LG Electronics is a part of LG Corporation, the fourth largest ''chaebol'' in South Korea, and often considered as ...
and Samsung, which are both based in South Korea. In 2016, China exported $425 million worth of washers to the United States, followed by Mexico with $240 million, and South Korean companies $130 million. Samsung and LG are among the top exporters of washers to the United States. Two weeks before the tariff announcement, Samsung had moved its production of washing machines to a new plant in South Carolina. In response Samsung said U.S. consumers will "pay more, with fewer choices". Mexican officials said they would respond to the tariffs during the ongoing NAFTA renegotiations.


Steel and aluminum

On March 1, 2018, Trump announced his intention to impose a 25% tariff on steel and a 10% tariff on aluminum imports. In a tweet the next day, Trump asserted, "Trade wars are good, and easy to win." On March 8, he signed an order to impose the tariffs effective after 15 days. The EU, Canada, Mexico, Australia, Argentina, Brazil and South Korea were temporarily exempted from the order under a carve-out provision. Canada, Mexico, and the EU became subject to the steel and aluminium tariffs later in an announcement on May 31, 2018. The U.S., Canada, and Mexico would reach a deal to remove the steel and aluminum tariffs in May 2019, almost a year after going into effect. In December 2019, Trump tweeted that he would impose tariffs on Brazilian and Argentine metals, effective immediately, alleging the countries were manipulating their currencies to make their products more attractive in global markets. Economists disagreed the countries were devaluing their currencies, attributing the declines to global market forces. After speaking with Brazilian president Jair Bolsonaro, Trump days later backed down from his threat against Brazil, but made no mention of Argentina.


Permanent steel exemption

While the 25% steel tariff as a rule applies to all countries worldwide, four countries have successfully negotiated a permanent exemption from it. Australian prime minister Malcolm Turnbull successfully lobbied President Trump to get an exemption at the
2017 G20 Hamburg summit The 2017 G20 Hamburg summit was the twelfth meeting of the Group of Twenty (G20), which was held on 7–8 July 2017, at Hamburg Messe, in the city of Hamburg, Germany. Agenda Apart from the recurring themes relating to global economic grow ...
, arguing " do this steel that's specialty steel. We're the only one that produces it in the world. You've got to let us out. You've got a $40 billion trade surplus with us. We're military allies with you. We're in every battle with you." However, On December 2, 2019, President Donald Trump reinstated steel and aluminium tariffs against Brazil, later backed down, and Argentina.


Legal basis and challenges

The legal basis cited in Trump's tariff order is Section 232 of the Trade Expansion Act of 1962 which under certain circumstances allows the president to impose tariffs based on the recommendation from the
U.S. Secretary of Commerce The United States secretary of commerce (SecCom) is the head of the United States Department of Commerce. The secretary serves as the principal advisor to the president of the United States on all matters relating to commerce. The secretary r ...
if "an article is being imported into the United States in such quantities or under such circumstances as to threaten or impair the national security."Shannon Togawa Mercer & Matthew Kahn
America Trades Down: The Legal Consequences of President Trump's Tariffs
, ''Lawfare'' (March 13, 2018).
This section is rarely used, and has never been invoked since the World Trade Organization was established in 1995. China initiated a WTO complaint against the U.S. steel and aluminum tariffs on April 9, 2018. The EU opened a similar WTO case on June 1, 2018. On June 9, 2018, Trump tweeted a statement addressing Prime Minister of Canada Justin Trudeau in which he said American tariffs targeting Canada "are in response to his ariffsof 270% on dairy!" In the tweet, Trump did not cite national security, the legal basis for implementing the tariff. In December 2022, the WTO ruled against the United States in steel and aluminum cases brought by China, Norway, Switzerland, and Turkey, saying that there was no national security emergency that justified U.S. invocation of the exception. The United States has blocked appointment of judges to the WTO appeals court, so its appeal prevents the ruling from being adopted. Cases brought by Russia and India remain unresolved.


Economic and trade analysis

A survey of leading economists by the Initiative on Global Markets at the University of Chicago
Booth School of Business The University of Chicago Booth School of Business (Chicago Booth or Booth) is the graduate business school of the University of Chicago. Founded in 1898, Chicago Booth is the second-oldest business school in the U.S. and is associated with 10 N ...
showed a consensus that imposing new U.S. tariffs on steel and aluminum will not improve Americans' welfare. Economists say the tariffs will lead to more harm than gains, as the price for steel increases, which will harm consumers and Americans working in manufacturing industries that use steel (these jobs outnumber those who work in steel-producing sectors by 80 to 1). The big winners of the tariffs are some American steel- and aluminum-producing industries; some of the producers (especially small- and middle-sized ones) who are reliant on foreign inputs may struggle as a result of the tariffs. A study of the proposal indicated that it would lead to an estimated loss of 146,000 jobs. Studies of the 2002 steel tariffs enacted by the Bush administration show that they caused more job losses than job gains. Jobs losses could be even greater if other countries retaliate against the United States with their own tariffs on various American products. Scholars warned that the Trump administration's use of "national security" rationales (these have not been commonly used by past administrations) for the tariffs could undermine the international trading order, as other states could use the same rationales for their own tariffs. The WTO allows states to take actions necessary to ensure their national security, but this provision has been sparsely used, given that it could be abused. Whereas national security reasons were cited for the tariffs, it has been noted that tariffs primarily harm American allies, not enemies; the United States imports very little steel and aluminum from China directly. Trade experts furthermore noted that the United States already produces more than two-thirds of its own steel. Forty-five U.S. trade associations are urging Trump not to impose tariffs on China, warning it would be "particularly harmful" to the
U.S. economy The United States is a highly developed mixed-market economy and has the world's largest nominal GDP and net wealth. It has the second-largest by purchasing power parity (PPP) behind China. It has the world's seventh-highest per capita GD ...
and consumers.Pete Schroeder
Forty-five U.S. trade groups urge Trump to avoid tariffs against China
, Reuters (March 18, 2018).
The National Retail Federation has been vocal in its opposition of the tariffs. The NRF also launched an ad campaign with
Ben Stein Benjamin Jeremy Stein (born November 25, 1944) is an American writer, lawyer, actor, comedian, and commentator on political and economic issues. He began his career as a speechwriter for U.S. presidents Richard Nixon and Gerald Ford before ente ...
, who reprised his role as the economics teacher from "Ferris Bueller's Day Off" arguing that tariffs are bad economics and hurt consumers. General Motors announced closure of plants in Maryland, Michigan, Ohio, and Ontario, and cutting over 14,000 jobs, citing steel tariffs as a factor. Trump expressed frustration with the decision.


Domestic political response

Domestically, reactions from elected officials often varied among regional lines rather than ideological lines. The tariffs have seen widespread criticism from
conservatives Conservatism is a cultural, social, and political philosophy that seeks to promote and to preserve traditional institutions, practices, and values. The central tenets of conservatism may vary in relation to the culture and civilization ...
and Republicans. However, the Republican-controlled
Congress A congress is a formal meeting of the representatives of different countries, constituent states, organizations, trade unions, political parties, or other groups. The term originated in Late Middle English to denote an encounter (meeting of ...
has thus far declined to take any action to counter Trump's imposition of tariffs.Lindsey McPherson
Ryan: Congress Won't Pass Tariff Legislation Trump Wouldn't Sign
, ''Roll Call'' (June 6, 2018).
Speaker Speaker may refer to: Society and politics * Speaker (politics), the presiding officer in a legislative assembly * Public speaker, one who gives a speech or lecture * A person producing speech: the producer of a given utterance, especially: ** In ...
Paul Ryan said Congress would not pass any tariff legislation that Trump would veto. Reception was mixed among Democratic officials, with Democrats from Rust Belt states voicing support for tariffs on steel and aluminum imports. The
AFL–CIO The American Federation of Labor and Congress of Industrial Organizations (AFL–CIO) is the largest federation of unions in the United States. It is made up of 56 national and international unions, together representing more than 12 million ac ...
, the largest labor union in the U.S., praised Trump for the tariffs, as did Democratic Ohio Senator Sherrod Brown, who said the action would be a boon for "steel plants across Ohio". Many congressional Republicans expressed fear that the tariffs might damage the economy or lead to retaliatory tariffs from other countries. Speaker of the House Paul Ryan and Senate Majority Leader Mitch McConnell urged Trump to rethink his proposal or to target the tariffs more narrowly so as to avoid "unintended consequences and collateral damage".
House Minority Leader Party leaders of the United States House of Representatives, also known as floor leaders, are congresspeople who coordinate legislative initiatives and serve as the chief spokespersons for their parties on the House floor. These leaders are ele ...
Nancy Pelosi, while calling for strategic and targeted actions against "trade cheaters," criticized Trump's rollout of the tariffs, calling it "chaotic" and saying it was "maximizing the collateral damage to American workers, consumers and our international alliances". The proposal drew comparisons to a tariff imposed by his Republican presidential predecessor,
George W. Bush George Walker Bush (born July 6, 1946) is an American politician who served as the 43rd president of the United States from 2001 to 2009. A member of the Republican Party, Bush family, and son of the 41st president George H. W. Bush, he ...
; in 2002 the U.S. imposed heavy
steel tariffs On March 5, 2002, U.S. President George W. Bush placed tariffs on imported steel. The tariffs took effect March 20 and were lifted by Bush on December 4, 2003. Research shows that the tariffs were a net positive, reviving many previously shuttered ...
that were largely seen as ineffectual or even harmful to the U.S., and were withdrawn after 18 months. On March 6, 2018,
Gary Cohn Gary David Cohn (born August 27, 1960) is an American business leader who served as the 11th Director of the National Economic Council and chief economic advisor to President Donald Trump from 2017 to 2018. He managed the administration's econo ...
, chair of the National Economic Council, announced his intention to resign; the announcement followed Trump's cancellation of a meeting with end-users of steel and aluminum that Cohn had arranged in an attempt to dissuade the president from the planned tariffs. A March 2018 Quinnipiac University poll showed widespread disapproval of the tariffs, with only 29% of Americans agreeing with a "25% tariff on steel imports and a 10% tariff on aluminum imports" if it raised their
cost of living Cost of living is the cost of maintaining a certain standard of living. Changes in the cost of living over time can be operationalized in a cost-of-living index. Cost of living calculations are also used to compare the cost of maintaining a cer ...
. On June 13, 2019, 661 American companies sent a letter to Trump urging him to resolve the trade dispute with China. The letter was one of many sent on behalf of Tariffs Hurt the Heartland, an organization of over 150 trade groups representing agriculture, manufacturing, retailing and technology companies.


Partial lifting

On May 17, 2019, the U.S. reached a deal to lift the steel and aluminum tariffs on Mexico and Canada. Lifting the tariffs were seen as helping pave the way for further ratification of the United States–Mexico–Canada Agreement. According to a joint statement, the Canadian and the U.S. governments said the U.S. will scrap the metals duties within two days of the deal. Canada will remove tariffs levied on American goods in retaliation for the steel and aluminum duties. The countries will also drop all pending litigation in the World Trade Organization related to the tariffs, set up measures to "prevent the importation of aluminum or steel that is unfairly subsidized and/or sold at dumped prices" and "prevent the transshipment of aluminum and steel made outside of Canada or the United States to the other country" and make an "agreed-upon process for monitoring aluminum and steel trade between them". In a separate statement, the Mexican government also said it would remove retaliatory tariffs it put on the U.S. and cease pending litigation. Mexico also said it would set up measures to stop unfair trade practices in the aluminum and steel markets and to monitor trade of the metals in North America. In 2021, the
Biden Administration Joe Biden's tenure as the 46th president of the United States began with his inauguration on January 20, 2021. Biden, a Democrat from Delaware who previously served as vice president under Barack Obama, took office following his victory ...
reached settlements with the United Kingdom and Japan to remove the tariffs. WTO says Trump's steel tariffs violated global trade rules
/ref>


Chinese products

On March 22, 2018, Trump signed a memorandum under the Section 301 of the
Trade Act of 1974 The Trade Act of 1974 (, codified at ) was passed to help industry in the United States become more competitive or phase workers into other industries or occupations. Fast track authority The Trade Act of 1974 created fast track authority fo ...
, instructing the
United States Trade Representative The Office of the United States Trade Representative (USTR) is an agency of the United States federal government responsible for developing and promoting American trade policy. Part of the Executive Office of the President, it is headed by t ...
(USTR) to apply tariffs of $50 billion on Chinese goods. Trump said the tariffs would be imposed due to Chinese theft of U.S intellectual property. Trump said his planned tariffs on Chinese imports would make the United States "a much stronger, much richer nation". However, the steps toward imposing the tariffs led to increased concerns of a global
trade war A trade war is an economic conflict often resulting from extreme protectionism in which states raise or create tariffs or other trade barriers against each other in response to trade barriers created by the other party. If tariffs are the exclu ...
. The
Dow Jones Industrial Average The Dow Jones Industrial Average (DJIA), Dow Jones, or simply the Dow (), is a stock market index of 30 prominent companies listed on stock exchanges in the United States. The DJIA is one of the oldest and most commonly followed equity indexe ...
fell 724 points, or 2.9%, after the tariffs were announced due to concerns over a trade war. Corporations that traded with China, such as
Caterpillar Inc. Caterpillar Inc. (stock symbol CAT) is an American ''Fortune'' 500 corporation and the world's largest construction-equipment manufacturer. In 2018, Caterpillar was ranked number 65 on the ''Fortune'' 500 list and number 238 on the Global ''Fo ...
and
Boeing The Boeing Company () is an American multinational corporation that designs, manufactures, and sells airplanes, rotorcraft, rockets, satellites, telecommunications equipment, and missiles worldwide. The company also provides leasing and produc ...
, suffered large losses in their stock price. In response, the Ministry of Commerce of the People's Republic of China announced plans to implement its own tariffs on 128 U.S. products. 120 of those products, such as fruit and wine, will be taxed at a 15% duty while the remaining eight products, including pork, will receive a 25% tariff. China implemented their tariffs on April 2, 2018. On April 3, 2018, the U.S. Trade Representative's office published an initial list of 1,300+ Chinese goods to impose levies upon, including products like flat-screen televisions, weapons, satellites, medical devices, aircraft parts and batteries. Chinese Ambassador
Cui Tiankai Cui Tiankai (; born October 1952) is a Chinese diplomat and longest-serving Chinese Ambassador to the United States, a role he filled from April 2013 to June 2021. Early life and education In 1952, Cui was born in Shanghai, China. He is a nat ...
responded by warning the U.S. that they may fight back, saying "We have done the utmost to avoid this kind of situation, but if the other side makes the wrong choice, then we have no alternative but to fight back." On April 4, 2018, China's Customs Tariff Commission of the State Council decided to announce a plan of additional tariffs of 25% on 106 items of products including automobiles, airplanes, and soybeans. Soybeans are the top U.S. agricultural export to China. The increased tit-for-tat tariff announcements stoked fears that the two countries are inching closer to a trade war. On April 4, 2018, President Trump responded to speculation tweeting: "We are not in a trade war with China, that war was lost many years ago by the foolish, or incompetent, people who represented the U.S. Now we have a Trade Deficit of $500 Billion a year, with Intellectual Property Theft of another $300 Billion. We cannot let this continue!" The next day Trump directed the USTR to consider $100 billion in additional tariffs. On May 9, 2018, China cancelled soybean orders exported from United States to China. Zhang Xiaoping, Chinese director for the U.S. Soybean Export Council, said Chinese buyers simply stopped buying from the U.S. On June 15, Donald Trump released a list of $34 billion of Chinese goods to face a 25% tariff, starting on July6. Another list with $16 billion of Chinese goods was released, with an implementation date of August 23. On July 10, the United States Trade Representative, in reaction to China's retaliatory tariffs that took effect July6, requested comments, gave notice of public hearings and issued a proposed list of Chinese products amounting to an annual trade value of about $200 billion that would be subjected to an additional 10% in duties on top of what those imported articles would normally pay. In 2018 China ended its domestic ownership rules for auto companies and financial institutions. The rules required that auto companies and financial institutions in China be at least 50 percent owned by Chinese companies. The change was seen as benefitting U.S. auto companies including Tesla. On May 9, 2019, Trump said the tariffs are "paid for mostly by China, by the way, not by us." Economic analysts concluded this was an incorrect assertion as American businesses and consumers ultimately pay the tariffs as real-world examples of tariffs working as intended are rare, and consumers of the tariff-levying country are the primary victims of tariffs, by having to pay higher prices. "It is inaccurate to say that countries pay tariffs on commercial and consumer goods—it is the buyers and sellers that bear the costs," said Ross Burkhart, a
Boise State University Boise State University (BSU) is a public research university in Boise, Idaho. Founded in 1932 by the Episcopal Church, it became an independent junior college in 1934 and has been awarding baccalaureate and master's degrees It became a p ...
political scientist. "Purchasers pay the tariff when they buy popular products. Sellers lose market share when their products get priced out of markets," Burkhart added. During the June
2019 G20 Osaka summit The 2019 G20 Osaka summit was the fourteenth meeting of the G20, a forum of 19 countries and the EU that together represent most of the world economy. It was held on 28–29 June 2019 at the International Exhibition Center in Osaka. It was ...
, China and America agreed to resume stalled trade talks, with Trump announcing he would suspend an additional $300 billion in tariffs that had been under consideration after talks failed the previous month, and asserting China had agreed to buy a "tremendous amount" of American farm products, although there were no specifics or confirmation of this by China. People familiar with the negotiations later said China made no explicit commitment as Trump had described.


South Korean products

On March 28, 2018, the United States and South Korea announced major changes to the bilateral
United States–Korea Free Trade Agreement The United States–Korea Free Trade Agreement (officially: Free Trade Agreement Between the United States of America and the Republic of Korea), also known as KORUS FTA, is a trade agreement between the United States and South Korea. Negotiation ...
(KORUS FTA) in response to the numerous tariffs and the proposed North Korean-United States diplomatic meeting. The 25 percent tariff on South Korean trucks will be extended until 2041, adding twenty years to the current 2021 target phase out date. No South Korean auto manufacturer exports trucks to the United States. The United States exempted South Korea from its steel tariffs, but imposed an import quota of about 2.68 million tonnes. South Korea was temporarily exempted from aluminum tariffs as well, but the exemption was removed effective May 1, 2018.


Retaliatory tariffs

China, Canada, and the European Union responded negatively to the initial announcement (which did not mention any temporary exemptions). Canada supplies 16% of U.S. demand for steel, followed by Brazil at 13%, South Korea at 10%, Mexico at 9%, and China at 2%.


Canadian

From 2013 to 2016, Canada was the largest source of aluminum imports to the U.S. Trump invoked national security grounds as justification for imposing steel and aluminum tariffs on Canada. Canadian Prime Minister Justin Trudeau said the idea "that Canada could be considered a national security risk to the United States" was "absurd" and "inconceivable" and called the tariffs "totally unacceptable." Trudeau announced $16.6 billion in retaliatory tariffs, saying "American people are not the target... We hope eventually that common sense will triumph. Unfortunately the actions taken today by the United States government do not appear headed in that direction." On July 1, 2018, Canada implemented retaliatory tariffs on U.S. imports. The value of the Canadian tariffs were set to match the value of the U.S. tariffs dollar-for-dollar and cover 299 U.S. goods, including steel, aluminum, and a variety of other products, including inflatable boats, yogurt,
whiskies Whisky or whiskey is a type of distilled alcoholic beverage made from fermented grain mash. Various grains (which may be malted) are used for different varieties, including barley, corn, rye, and wheat. Whisky is typically aged in wooden cask ...
,
candle A candle is an ignitable wick embedded in wax, or another flammable solid substance such as tallow, that provides light, and in some cases, a fragrance. A candle can also provide heat or a method of keeping time. A person who makes candles i ...
s, and
sleeping bags A sleeping bag is an insulated covering for a person, essentially a lightweight quilt that can be closed with a zipper or similar means to form a tube, which functions as lightweight, portable bedding in situations where a person is sleeping o ...
before the tariffs were lifted on May 20, 2019.


Chinese

The Chinese government placed retaliatory tariffs on U.S. goods. China threatened to curb imports of U.S. soybeans. A June 2019 analysis conducted by the Peterson Institute for International Economics found that China had imposed the same 8% average tariffs on all countries in January 2018, but by June 2019 average tariffs on American exports had increased to 20.7% while those on other countries had declined to 6.7%


European

Jean-Claude Juncker, the president of the European Commission, condemned U.S. steel and aluminum tariffs and announced that a legal challenge at the World Trade Organization would follow. The EU filed the WTO challenge against the United States on June 1, once the tariffs took effect. Retaliatory tariffs from the European Union took effect on June 22, 2018, imposing tariffs on 180 types of products, in total worth over $3 billion of U.S. goods. Affected products include steel and aluminum, agricultural goods (including
orange juice Orange juice is a liquid extract of the orange tree fruit, produced by squeezing or reaming oranges. It comes in several different varieties, including blood orange, navel oranges, valencia orange, clementine, and tangerine. As well as var ...
and
cranberry juice Cranberry juice is the liquid juice of the cranberry, typically manufactured to contain sugar, water, and other fruit juices. Cranberry – a fruit native to North America – is recognized for its bright red color, tart taste, and versat ...
), clothing, washing machines, cosmetics, and boats.Shannon Van Sant & Bill Chappell
EU Tariffs Take Effect, Retaliating For Trump's Tariffs on Steel and Aluminum
, NPR (June 22, 2018).
European Commissioner for Trade The European Commissioner for Trade (sometimes referred to as the ''EU Trade Commissioner'') is the member of the European Commission responsible for the European Union's common commercial policy. Responsibilities The Commissioner heads up the ...
Cecilia Malmström Anna Cecilia Malmström (born 15 May 1968) is a Swedish politician who served as European Commissioner for Trade from 2014 to 2019. She previously served as European Commissioner for Home Affairs from 2010 to 2014 and Minister for European Un ...
stated: "The rules of international trade, which we have developed... with our American partners, cannot be violated without a reaction from our side. Our response is measured, proportionate and fully in line with WTO rules." Among the U.S. manufacturers affected by the EU's responsive tariffs is Harley-Davidson, which announced that it would move some of their manufacturing out of the United States. Another is the James E. Pepper whiskey distillery in Kentucky, which, due to raised prices, lost most of its foreign business; as of mid-2021, the business had not recovered. The ongoing conflict between American aircraft manufacturer Boeing and European manufacturer Airbus over government subsidies had been going on for more than two decades. After the World Trade Organization gave the U.S. a green light to impose tariffs because of subsidies from the governments of Spain, France, Germany, and the United Kingdom to Airbus, European Commission spokesperson Daniel Rosario threatened retaliatory measures if the United States imposes a US$7.5 billion (€6.823 billion) tariff on products such as olives, whiskey, wine, cheese, yogurt, and airplanes. The tariffs were in addition to those imposed in 2018. they were in effect. Under President Joe Biden, the United States embarked on an effort to settle several trade disputes with allies, including both ones originating under President Trump and longer-standing ones. The United States and the European Union announced on October 31, 2021, in a joint statement that tariffs on steel and aluminium would be lifted under a certain volume and replaced by bilateral tariff-rate quotas that would allow for historical volumes of trade. European tariffs on American metal and iconic American exports would also end and further European retaliatory tariffs that would be implemented on December 1 were forestalled. The steel and aluminium have to be entirely produced in the EU to qualify for duty-free status. A similar system of duty-free quotas was announced on March 22, 2022, for steel and aluminium products from the United Kingdom within historical volumes. An audit regime was agreed upon for Chinese-owned steel companies. In return British retaliatory tariffs would be lifted. The United States announced a suspension for the duration of one year placed on tariffs on Ukrainian steel on May 9, 2022, in view of the Russian invasion of Ukraine.


Indian

On June 16, 2019, India imposed retaliatory tariffs on 28 U.S. products, $240 million worth of goods, with some levies reaching 70 percent. Affected products include apples, almonds,
walnut A walnut is the edible seed of a drupe of any tree of the genus '' Juglans'' (family Juglandaceae), particularly the Persian or English walnut, '' Juglans regia''. Although culinarily considered a "nut" and used as such, it is not a true ...
s,
lentil The lentil (''Lens culinaris'' or ''Lens esculenta'') is an edible legume. It is an annual plant known for its lens-shaped seeds. It is about tall, and the seeds grow in pods, usually with two seeds in each. As a food crop, the largest produ ...
s, and some chemical products; India is the largest buyer of U.S. almonds, paying $543 million for more than half of the imports. It's also the second-largest buyer of U.S. apples, buying $156 million worth in 2018. The tariffs were in response to the U.S.'s refusal to exempt India from higher tariffs on steel and aluminum imports and in response to the U.S. withdrawing India from the
Generalized System of Preferences The Generalized System of Preferences, or GSP, is a preferential tariff system which provides tariff reduction on various products. The concept of GSP is very different from the concept of " most favored nation" (MFN). MFN status provides equal tre ...
on June 5. India had announced retaliatory tariff increases totaling $235 million on U.S. goods in June 2018, but trade talks had delayed their implementation.


Mexican

In response to the imposition of U.S. tariffs, Mexico implemented retaliatory tariffs on around US$3 billion (MXN $58.6 billion) worth of U.S. goods. These Mexican tariffs, which went into effect on June 5, 2018, were imposed on U.S. steel, pork, cheese, whiskey, and apples, among other goods before being lifted on May 20, 2019.


Proposed


Automobiles

During his presidential campaign, Trump said he would impose tariffs—between 15 and 35%—on companies that moved their operations to Mexico. Trump proposed a 35% tariff on "every car, every truck and every part manufactured in Ford's Mexico plant that comes across the border". Tariffs at that level would be far higher than the international norms (which are around 2.67% for the U.S. and most other advanced economies and under 10% for most developing countries). After the European Union threatened to impose retaliatory tariffs should a tariff on steel and aluminum be imposed, on March 3, 2018, Trump countered with a threat to impose tariffs on European car manufacturers. In May 2019, Trump threatened to impose tariffs of up to 25 percent on automobiles and parts on the basis that a weakening internal U.S. economy constituted a national security threat, but delayed the imposition of the tariffs for six months to allow for trade talks with the European Union and Japan.


All Mexican imports

On May 30, 2019, Trump unexpectedly announced that he would impose a 5% tariff on all imports from Mexico on June 10, increasing to 10% on July 1, and by another 5% each month for three months, "until such time as illegal migrants coming through Mexico, and into our Country, STOP." Hours later, Republican senator
Chuck Grassley Charles Ernest Grassley (born September 17, 1933) is an American politician serving as the president pro tempore emeritus of the United States Senate, and the senior United States senator from Iowa, having held the seat since 1981. In 2022, he ...
, chairman of the Senate Finance Committee, commented, "This is a misuse of presidential tariff authority and counter to congressional intent. Following through on this threat would seriously jeopardize passage of USMCA, a central campaign pledge of President Trump's and what could be a big victory for the country." That same day, the Trump administration formally initiated the process to seek congressional approval of USMCA. Trump's top trade advisor,
US Trade Representative The Office of the United States Trade Representative (USTR) is an agency of the United States federal government responsible for developing and promoting American trade policy. Part of the Executive Office of the President, it is headed by the ...
Robert Lighthizer Robert Emmet Lighthizer (; born October 11, 1947) is an American attorney and government official who served as the United States Trade Representative from 2017 to 2021. After he graduated from Georgetown University Law Center in 1973, Lighthi ...
, opposed the new Mexican tariffs on concerns it would jeopardize passage of USMCA. Treasury secretary Steven Mnuchin and Trump senior advisor
Jared Kushner Jared Corey Kushner (born January 10, 1981) is an American businessman and investor. He served as a senior advisor to 45th U.S. president Donald Trump, his father-in-law. Since leaving the White House, Kushner founded Affinity Partners, a priv ...
also opposed the action. Grassley, whose committee is instrumental in passing USMCA, was not informed in advance of Trump's surprise announcement. An array of lawmakers and business groups expressed consternation about the proposed tariffs. With 2018 imports of Mexican goods totaling $346.5 billion, a 5% tariff constitutes a tax increase of over $17 billion. On the evening of June7, Trump announced that the planned Mexico tariffs were "indefinitely suspended" after Mexico agreed to take stronger measures to curb immigration across the border of the U.S. According to the deal, Mexico agreed to deploy 6,000 of its National Guard troops throughout the country, with a focus on its southern border with Guatemala. Mexico also agreed to house migrants seeking asylum in the U.S.—including housing, offering jobs, health care and education—while the U.S. agreed to accelerate asylum claims. If the deal does not have the "expected results," then the two nations will meet again in 90 days. Trump also tweeted that Mexico had agreed to "immediately" begin buying agricultural products from U.S. farmers, although the communique between the countries did not mention any such deal and Mexican officials were reportedly not aware of such discussions; American officials declined to comment. ''The New York Times'' reported the next day that Mexico had already agreed to most of the actions months prior. On June 9, as critics continued to downplay the significance of the deal, Trump called ''The New York Times'' report "false", tweeting "We have been trying to get some of these Border Actions for a long time... but were not able to get them, or get them in full, until our signed agreement with Mexico." The ''Times'' stood by its reporting. Trump also threatened that he could return to using tariffs as a tactic if desired. Mexico's ambassador to the U.S., Martha Bárcena Coqui, addressed Trump's defense of the deal on
CBS CBS Broadcasting Inc., commonly shortened to CBS, the abbreviation of its former legal name Columbia Broadcasting System, is an American commercial broadcast television and radio network serving as the flagship property of the CBS Entertainme ...
, saying "There are a lot of details that we discussed during the negotiations... that we didn't put into the declaration because there are different paths that we have to follow," adding that adjustments will be made as the situation on the border evolves.


Effects

The Trump administration's tariffs were received negatively by the majority of economists and analysts, with general consensus among experts—including U.S. Director of the National Economic Council
Larry Kudlow Lawrence Alan Kudlow (born August 20, 1947) is an American conservative television personality and financial program host for the Fox network who served as the Director of the National Economic Council (United States), National Economic Council ...
—being that the tariffs either had no direct benefits on the U.S. economy and GDP growth or they had a small to moderately negative impact on the economy. In a March 2018 Reuters survey, almost 80% of 60 economists believed the tariffs on steel and aluminum imports would be a net harm to the U.S. economy, with the rest believing the tariffs would have little or no effect; none of the economists surveyed believed the tariffs would benefit the U.S. economy. In May 2018, more than 1,000 economists wrote a letter warning Trump about the dangers of pursuing a
trade war A trade war is an economic conflict often resulting from extreme protectionism in which states raise or create tariffs or other trade barriers against each other in response to trade barriers created by the other party. If tariffs are the exclu ...
, arguing that the tariffs were echoing historical policy errors, such as the
Smoot–Hawley Tariff Act The Tariff Act of 1930 (codified at ), commonly known as the Smoot–Hawley Tariff or Hawley–Smoot Tariff, was a law that implemented protectionist trade policies in the United States. Sponsored by Senator Reed Smoot and Representative Willi ...
, which helped lead to the Great Depression.


Economic

A study published in fall 2019 in the '' Journal of Economic Perspectives'' found that by December 2018, Trump's tariffs resulted in a reduction in aggregate U.S.
real income Real income is the income of individuals or nations after adjusting for inflation. It is calculated by dividing nominal income by the price level. Real variables such as real income and real GDP are variables that are measured in physical units, ...
of $1.4 billion per month in deadweight losses, and cost U.S. consumers an additional $3.2 billion per month in added tax. The study's authors noted that these were conservative measures of the losses from the tariffs, because they did not take account of the tariffs' effects in reducing the variety of products available to consumers, or the tariff-related costs attributable to policy uncertainty or the fixed costs incurred by companies to reorganize their global supply chains. A study by Federal Reserve Board economists found that the tariffs reduced employment in the American manufacturing sector. An April 2019 working paper by economists found that the tariffs on washing machines caused the prices of washers to increase by approximately twelve percent in the United States. A 2019 paper by Federal Reserve Board economists found that the steel tariffs led to 0.6% fewer jobs in the manufacturing sector than would have happened in the absence of the tariffs; this amounted to approximately 75,000 jobs. In May 2019, analyses from varying organizations were released. A May 2019 Goldman Sachs analysis found that the
consumer price index A consumer price index (CPI) is a price index, the price of a weighted average market basket of consumer goods and services purchased by households. Changes in measured CPI track changes in prices over time. Overview A CPI is a statistic ...
(CPI) for tariffed goods had increased dramatically, compared to a declining CPI for all other core goods. A CNBC analysis that month found that Trump had "enacted tariffs equivalent to one of the largest tax increases in decades," while Tax Foundation and
Tax Policy Center The Urban-Brookings Tax Policy Center, typically shortened to the Tax Policy Center (TPC), is a nonpartisan think tank based in Washington D.C. A joint venture of the Urban Institute and the Brookings Institution, it aims to provide independent ...
analyses found the tariffs could offset the benefits of the
Tax Cuts and Jobs Act of 2017 The Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018, , is a congressional revenue act of the United States originally introduced in Congress as the Tax Cuts and Jobs A ...
for many households. The Tax Foundation found that if all existing and proposed tariffs were fully implemented, the benefits of the Trump tax cut would be completely eliminated for all taxpayers through the 90th percentile in earnings. Another May 2019 analysis conducted by the National Taxpayers Union warned that the existing and proposed additional tariffs, if fully implemented, would constitute the largest tax increase of the
post-war In Western usage, the phrase post-war era (or postwar era) usually refers to the time since the end of World War II. More broadly, a post-war period (or postwar period) is the interval immediately following the end of a war. A post-war period ...
era. According to an analysis by Peterson Institute for International Economics economists, American businesses and consumers paid more than $900,000 a year for each job that was created or saved as a result of the Trump administration's tariffs on steel and aluminum. The cost for each job saved as a result of the administration's tariffs on washing machines was $815,000. Analysis conducted by Deutsche Bank estimated that Trump's trade actions had resulted in foregone American stock market capitalization of $5 trillion through May 2019. Trump announced on August 1, 2019, that he would impose a 10% tariff on $300 billion of Chinese imports beginning September1; four days later the Chinese Commerce Ministry announced that China was halting imports of all American agricultural goods.
American Farm Bureau Federation The American Farm Bureau Federation (AFBF), also known as Farm Bureau Insurance and Farm Bureau Inc. but more commonly just the Farm Bureau (FB), is a United States-based insurance company and lobbying group that represents the American agr ...
data showed that agriculture exports to China fell from $19.5 billion in 2017 to $9.1 billion in 2018, a 53% decline. The figure was $21.4 billion in 2016. A September 2019 Federal Reserve study found that tariffs Trump imposed through mid-2019, combined with the policy uncertainty they created, would reduce the 2020 real GDP growth rate by one percentage point. A study by four economists published in October 2019 by the ''
Quarterly Journal of Economics ''The Quarterly Journal of Economics'' is a peer-reviewed academic journal published by the Oxford University Press for the Harvard University Department of Economics. Its current editors-in-chief are Robert J. Barro, Lawrence F. Katz, Nathan ...
'' estimated that U.S. consumers and firms who buy imports lost $51 billion (0.27% of GDP) as a result of the 2018 tariffs. After accounting for increases in government tariff revenue and gains to U.S. producers, the study authors estimated the aggregate U.S.
real income Real income is the income of individuals or nations after adjusting for inflation. It is calculated by dividing nominal income by the price level. Real variables such as real income and real GDP are variables that are measured in physical units, ...
loss to be $7.2 billion (0.04% of GDP). The study found that "retaliatory tariffs resulted in a 9.9% decline in U.S. exports within products." The study also found that workers in heavily Republican counties suffered the most from the trade war, because retaliatory tariffs focused on agricultural products. Between the time Trump took office in 2017 through March 2019, the U.S.'s trade deficit grew by $119 billion, reaching $621 billion, the highest it had been since 2008. As of January 2020, the Trump administration had imposed tariffs on 16.8% of all goods imported into the U.S. (measured as a share of the value of all U.S. imports in 2017). The
Congressional Budget Office The Congressional Budget Office (CBO) is a federal agency within the legislative branch of the United States government that provides budget and economic information to Congress. Inspired by California's Legislative Analyst's Office that manages ...
(CBO) published its estimate of the U.S. economic impact from Trump's trade policies:


Political

Studies have found that the tariffs adversely affected Republican candidates in elections. A study by the
University of Warwick , mottoeng = Mind moves matter , established = , type = Public research university , endowment = £7.0 million (2021) , budget = £698.2 million (2020� ...
's economists found that the tariffs negatively impacted the electorate in districts that swung to Trump (relative to Mitt Romney's 2012 performance), and that as a result of the retaliatory tariffs, Republican candidates fared worse by between 1.4 and 2.7 percentage points in counties in the top decile of the exposure distribution implied by the Chinese, Canadian and Mexican retaliation. The analysis also found that the retaliatory tariffs implemented by the EU were carefully structured so as to not harm the EU itself, whereas China implemented tariffs that harmed industries both in China and in the U.S. A 2021 study found that Chinese retaliatory tariffs systematically targeted Republican counties in swing congressional districts, and that voters in such counties became more aware of the trade war, its adverse impact, and that they assigned Republicans responsibility for escalating the trade dispute. The Asian Trade Centre argued that Trump's usage of trade policy as a tactic to push non-trade related political initiatives, particularly his May 2019 threat to levy Mexican imports until they crackdown on illegal immigration, set a negative precedent for future U.S. presidents and damaged the credibility of the U.S. as a reliable trade partner.


See also

* United States–Mexico–Canada Agreement (USMCA) *
List of tariffs in the United States This is a list of United States tariffs. * 1789: Tariff of 1789 (Hamilton Tariff) * 1790: Tariff of 1790 * 1792: Tariff of 1792 * 1816: Tariff of 1816 * 1824: Tariff of 1824 * 1828: Tariff of 1828 * 1832: Tariff of 1832 * 1833: Tariff of 1833 ...
* Tariff in United States history *
Protectionism in the United States Protectionism in the United States is protectionist economic policy that erects tariffs and other barriers on imported goods. In the US this policy was most prevalent in the 19th century. At that time it was mainly used to protect Northern in ...


Further reading

* Daniel W. Drezner (2019) Economic Statecraft in the Age of Trump, The Washington Quarterly, 42:3, 7–24.


References

{{DEFAULTSORT:Trump Tariffs United States federal trade legislation Policies of Donald Trump United States economic policy Economic history of the United States Customs duties 2018 in the United States 2018 in economics 2018 in international relations Trump administration controversies