27 Jan 2025
U.S. Trade Policy under Trump: Insights from a European Perspective
Trade policy in the United States has undergone significant transformations over the past decades, often reflecting broader shifts in global geopolitics. Prof. Dr. Manfred Elsig visited Taiwan at the end of 2024 to discuss the potential impacts of the Trump Administration’s trade policy and other emerging trends with a range of think tanks, academic institutions and the Taiwanese Ministry of Economic Affairs and Institute for National Policy Research.
America First?
From the leadership in the post-war Bretton Woods era to the rise of protectionist reflexes, the Trump administration's "America First" strategy marked a dramatic shift. This post examines the evolution of U.S. trade policy under Trump, its implications for globalization, and how it contrasts with previous administrations, including the potential for a Trump 2.0 scenario. Hear more from Prof. Dr. Manfred Elsig, Deputy Managing Director of the World Trade Institute at the University of Bern.
U.S. Leadership in Trade Policy: A Historical Perspective
For decades, the U.S. championed multilateral trade liberalization. The establishment of institutions like the IMF, World Bank, and GATT post-World War II showcased its leadership in multilateralism. During the Cold War, the U.S. played a pivotal role in pushing for liberalization, and this created a pathway to the WTO's creation in 1995. Despite this, protectionist measures periodically emerged as a result of political pressure within the U.S. itself, from Johnson's "Chicken War" tariffs in the 1960s to Nixon's import taxes in the 1970s and Reagan's focus on Japanese imports in the 1980s.
The Trump Administration: A New Direction
The Trump presidency brought a shift in U.S. trade policy, characterized by unilateralism, skepticism toward traditional trade agreements, and a focus on reducing trade deficits. The trajectory of U.S. trade policy under Trump underscored the complexities of balancing national interests with global interconnectedness. While the Biden administration had previously sought to stabilize alliances, Trump's return brings about renewed uncertainty. His administration is employing tools relating to higher tariffs, disengagement from the WTO and other international organizations – and trade tensions, particularly focusing on China and the EU’s climate-focused trade measures may clash with U.S. policies.
For Europe and other global actors, preparing for either continuity or disruption is essential.