US Interest in Trade

Adeline Tavarez
April 16, 2018
American Foreign Policy

What are the US interests in trade?  Is it to create a freer, more prosperous world, to satisfy local interests by 'winning' trade, to serve interest groups, or to build a US-led world order?  Or is it some combination of the above?

Over the years the US interests in trade have changed. They have changed to further the US's economic and political goals. The US began with a multilateral approach in trade to strengthen the free world through international cooperation, but since has shifted to a more bilateral approach aimed to strengthen domestic economic interest and political objectives. 

The current administration has been very against a multilateral approach in trade. Donald Trump is focusing more on local interests and 'winning' trade, despite the fact that our interests abroad are being jeopardized. He believes that a bilateral approach will allow better terms for the American people. Yet, the US has treaties with more than 30 countries that help bring stability to different regions in the United States. The European Union alone generates $699 billion through trade with the US. Keeping Europe unified and a priority in US foreign relations is really important. In defending NATO states, the US gets military and political protection, but also its allies cover $2.5 billion annually in cost for the US. A multilateral approach allows the US to get bases in other nations like South Korea and Japan, which overall generate over $309 billion in trade for the US, while also providing allies against China and North Korea.

Trump proved his dislike to a multilateral approach by pulling out of the Trans-Pacific Partnership (TPP), which was introduced by President Obama. TPP was a deal that would have allowed nations like Canada, Chile, Australia and Japan to follow the same trade rules, and it would go against China. One main reason that Trump pulled out of the TPP was to put "America First." He wanted to make sure that jobs would return to America, along with companies. He made it known that throughout his administration he would only be signing deals with individual allies. Along with pulling out of TPP, Trump has taken an initiative to renegotiate US's role in the North American Free Trade Agreement (NAFTA). Another way to pull away from a multilateral approach and put "America First."

Through these different decisions, Trump is fostering a "winning" trade deal mentality. He wants to focus on being the sole savior of what he believes is harming the US's domestic economy. This is proven by Trump's latest decision to impose tariffs on steel and aluminum. In doing so Trump argues that imposing these tariffs are a matter of US security, one that is not just a choice for him. However, many warn that a trade war could occur due to this decision. Retaliation is on the table for countries like China, who vow to impose their own tariffs if Trump goes through in signing this deal.