Think of American trade policy as the engine that drives the country’s economic growth. The United States has long been an open, outward-looking nation that promotes free trade and encourages foreign investment. Today, the U.S. stands among the most open economies in the world.
On January 1st, 2018, a new administration took office in Washington DC. President Donald Trump campaigned on several platforms concerned with what his supporters regard as unfair trading practices by other countries and threats to American jobs from outsourcing or offshoring.
To ensure fair competition, reduce import costs, and support domestic production and manufacturers, governments around the world impose tariffs and other measures to protect their industries from foreign competition.
American farmers have traditionally depended on foreign markets to sell their agricultural produce at prices they can earn from farming operations rather than from raising livestock or growing crops for sale in local markets or through distribution channels such as wholesalers or retailers.
With about 1% of farmland yet supplying about 50% of vegetable crops (including root vegetables), America has become synonymous with global agribusinesses like Big Beef whose beef exports have taken a hit following restrictions put into place by South American nations over concerns about Bovine Spongiform Encephalopathy (BSE).
How does the United States develop trade policy?
Trade policy is the set of laws, regulations, and other measures a country uses to attract or discourage foreign trade and investment. It also covers domestic policies that affect international trade, such as taxation. International trade is regulated by the governments of individual countries, which may have interests that may or may not be aligned with those of their citizens.
The trade policy of a country often depends on the balance of economic, political, and social factors. A country’s trade policy is often influenced by other countries and the international community’s consensus on how best to promote international trade. Governments also take into account the state of their local economy and the economic needs of their people in making decisions about trade policy.
Trade wars and tariffs: a brief history
The history of U.S. trade policy can be traced back to the colonial era. As early as the 1690s, the American colonies imported many European products, including wine, textiles, and books. Some of these products were produced in Europe but were not available in the colonies.
The colonists imported these goods to satisfy their needs, but they also imported products that could be sold in the colonies or taken home by the colonists as supplies to support their families. The practice of using tariffs to protect domestic industries dates back to the time of the American Revolution. At that time, Americans saw tariffs as a way to pay for the war effort and to help the economy recover from the war.
In the decades that followed, tariffs were collected to help fund the federal government as well as to protect certain industries from foreign competition. During the period between the Civil War and World War I, tariffs were used to protect domestic industries from foreign competition. In the early 20th century, the United States began to pursue free trade policies, although many businesses and manufacturers resisted the change.
On to new heights: the next frontier of American trade policy
In the new administration, the focus of U.S. trade policy is on strengthening the country’s global competitiveness, improving the business environment, and expanding market access for U.S. companies and products. The Trump administration is pursuing a comprehensive approach to trade policy that builds on the United States’ competitive advantages, including technological leadership, a vibrant service sector, and a global economy that is deeply integrated with the rest of the world.
The administration is prioritizing three objectives: boosting economic growth, advancing U.S. interests, and protecting the American worker and the U.S. consumer. The Trump administration has taken several steps in support of these objectives, including advancing the new direction for U.S. trade policy; launching the United States’ first-ever National Trade Action Strategy; announcing a comprehensive approach to trade policy; renewing the Special 301 process; and more.
The future of U.S. trade policy: moving backward or forward?
In many ways, the future of U.S. trade policy is already unfolding. Progress has been made on several fronts in recent years, including improving the business environment, expanding market access, and strengthening U.S. global competitiveness. At the same time, however, the Trump administration has signaled that it wants to take a new direction with the U.S. trade policy.
The United States’ new trade policy seeks to strengthen U.S. competitiveness and boost economic growth, while also prioritizing the interests of American workers and consumers. The new direction emphasizes fairness and reciprocity in all of the United States’ trade relationships.