One of President Donald Trump’s priorities in his first term was a return to the era of tariffs and protectionist policies, and he’s wasted no time in his second term on bringing those priorities to bear.
On his inauguration day, Trump signed an executive order titled “America First Trade Policy,” with the broad aim to address the U.S.’s trade deficits and its economic relationships, including its economic relationships with the World Trade Organization, the United States-Mexico-Canada Agreement and China.
More recently, at a press conference on Feb. 24, Trump said that the U.S. has been mistreated in its trade relationships.
“We’ve been mistreated very badly by many countries, not just Canada and Mexico. We’ve been taken advantage of,” Trump said. “We were led by, in some cases, fools, because anybody that would sign documents like they signed where they were able to take advantage of the American people has happened over the last long period of time, except a little four year period that took place four years ago. But anybody that would agree to allow this to happen to our country should be ashamed of themselves.”
Economic relationships, with Canada, China and Mexico, have largely hinged on reducing barriers and duties on trade in the preceding decades, with the negotiation of the North American Free Trade Agreement and the induction of China into the World Trade Organization as two of the most notable moments.
But just weeks into his second term, the U.S.’s neighbors were confronted with the very real prospect of tariffs for the first time in decades, with Trump signing two executive orders on Feb. 1 that would have imposed an additional 25% tariffs on products of Mexico and Canada. Energy products from Canada were an exception to the 25% tariff, registering at 10% instead.
Following phone calls from Mexico’s President Claudia Sheinbaum and Canada’s Prime Minister Justin Trudeau, a pause was put in place on the tariffs until March 4.
On Feb. 24, President Trump said at a press conference that the tariffs were on time and it was a situation that was moving very rapidly.
“The tariffs are going forward, on time, on schedule,” Trump said. “This is an abuse that took place for many, many years. And I’m not even blaming the other countries that did this, I blame our leadership for allowing it to happen.”
A report from the nonprofit, nonpartisan Brookings Institution found that tariffs on Canada and Mexico would negatively impact GDP growth for all three countries, but more significantly for Canada and Mexico.
The tariff imposed on China, signed on the same day as the tariffs on America’s neighbors, was smaller, at an additional 10% for products from China. That order was not subject to the same blanket pause, although an amendment to the executive order, published Feb. 5, did pause the tariffs on some imports to give the Secretary of Commerce time to properly implement the order.
Specific countries weren’t the only target, with the two resources that make up the nation’s cars, cans and buildings, aluminum and steel, also a focus of the oval office.
On Feb. 10 and 11, Trump signed two executive orders that will raise the tariffs on steel and aluminum products, with a particular impact on countries that had negotiated exemptions to existing steel and aluminum tariffs. Argentina, Australia, Brazil, Canada, the EU countries, Japan, Mexico, South Korea and the United Kingdom all had agreements in place with the U.S. on steel and aluminum. Ukraine, which is also impacted, only had an agreement in place on steel imports.
In addition to the ending of the exemptions, the tariff rate on aluminum was increased from 10% to 25%, and the tariffs were expanded to include more steel and aluminum derivative products. The steel and aluminum tariffs are slated to go into effect on March 12.
Last week, the administration also turned its focus to the digital world, with an order titled “Defending American Companies and Innovators From Overseas Extortion and Unfair Fines And Penalties.”
The order states that the U.S. will consider tariffs and other retaliatory actions to foreign governments that impose digital service taxes, fines, practices or policies on American companies.
Another order highlights the administration’s policy around international investment in the U.S. The stated intent of the order is to prevent China and other countries deemed as foreign adversaries from investing in U.S. technology, critical infrastructure, health care, agriculture, energy, raw materials or other strategic sectors.
It aims to do this while also preserving an open investment environment, and included a call for the creation of a “fast-track” investment process from specified allied and partner sources. It also includes an expedited environmental review for investments over $1 billion in the U.S.