Trump’s Trade Policy Went Wrong
US President Trump broke trade wars with a roar and promised to bring jobs back to the USA. A new study now shows that he actually succeeded in the opposite. His successor wants to do it differently.
According to a study, US President Donald Trump has not achieved the desired success with his aggressive trade policy. According to a new study by the German Institute for Economic Research (DIW), neither the termination and renegotiation of various agreements nor the numerous import tariffs have created jobs in the USA or significantly reduced trade deficits.
“Only the trade deficit with China shrank a little last year, but has already increased again this year,” said study author Geraldine Dany-Knedlik. “In trade with Europe and the other North American countries Canada and Mexico, the measures have hardly worked at all.” In particular, steel, computer, and electronics imports from China fell noticeably with the introduction of the tariffs. In other areas, such as household appliances and electronic components, there was also a decline. But the tariffs would have made imports more expensive for American companies and households.
Biden has a different strategy
“This is the crux of Trump’s trade policy: He wanted to make US products more attractive through tariffs. Instead, his policy has made products more expensive,” said study author Paul Berenberg-Gossler. Studies put the welfare losses of US consumers as a result of the import duties levied until December 2018 at more than 50 billion euros annually.
In particular, the manufacturing industry, which is dependent on imports from China as intermediate inputs, has to contend with higher production costs, emphasized the DIW. This particularly affects the so-called “Rust Belt” states as well as Mississippi and Alabama. Around 75,000 jobs were lost as a result of this policy.
Trump’s designated successor Joe Biden has already announced that he will initially not change the trade agreements with China. “I’m not going to take any steps immediately, including tariffs,” Biden told the New York Times in early December. “I will not limit my options.”
Trump’s Trade Policy Went Wrong
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