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Tariffs in the first Trump administration
Tariffs during the first presidency of Donald Trump involved protectionist trade initiatives against other countries, most notably China. It principally involved tariffs on foreign imports imposed by Donald Trump, the 45th president of the United States. Since long before he became president in 2017, Trump had promoted tariffs on imports to retaliate against countries he believes are "ripping-off" the United States. Trump has insisted that foreign nations pay the tariffs he imposes; however, several economists say the reality is that American importers pay them.
In January 2018, Trump imposed tariffs on solar panels and washing machines of 30–50%. In March 2018, he imposed tariffs on steel (25%) and aluminum (10%) from most countries, which, according to Morgan Stanley, covered an estimated 4.1% of U.S. imports. In June 2018, this was extended to the European Union, Canada, and Mexico. The Trump administration separately set and escalated tariffs on goods imported from China, leading to a trade war.
Trading partners implemented retaliatory tariffs on U.S. goods. In June 2018, India planned to recoup trade penalties of $241 million on $1.2 billion worth of Indian steel and aluminum, but attempted talks delayed these until June 2019 when India imposed retaliatory tariffs on $240 million worth of U.S. goods. Canada imposed matching retaliatory tariffs on July 1, 2018. China implemented retaliatory tariffs equivalent to the $34 billion tariff imposed on it by the U.S. In July 2018, the Trump administration announced it would use a Great Depression-era program, the Commodity Credit Corporation (CCC), to pay farmers up to $12 billion, increasing the transfers to farmers to $28 billion in May 2019. The USDA estimated that aid payments constituted more than one-third of total farm income in 2019 and 2020.
Tariff negotiations in North America were relatively more successful, with the U.S. lifting the steel and aluminum tariffs on Canada and Mexico on May 20, 2019, joining Australia and Argentina in being the only nations exempted from the regulations. However, on May 30, Trump unilaterally announced his intention to impose a five percent tariff on all imports from Mexico beginning on June 10, with tariffs increasing to 10% on July 1, and by another 5% each month for three months, "until such time as illegal migrants coming through Mexico, and into our Country, STOP", adding illegal immigration as a condition for U.S.-Mexico tariff negotiations. The move was seen as threatening the ratification of the United States–Mexico–Canada Agreement (USMCA), the North American trade deal set to replace the North American Free Trade Agreement (NAFTA). The tariffs were averted on June 7 after negotiations.
A May 2019 analysis conducted by CNBC found Trump's tariffs are equivalent to one of the largest tax increases in the U.S. in decades. Studies have found that Trump's tariffs reduced real income in the United States, as well as adversely affecting U.S. GDP. Some studies also concluded that the tariffs adversely affected Republican candidates in elections. A study found that political donations had a notable impact on the likelihood of tariff exemptions.
President Trump's successor, President Biden, kept most of the tariffs in place, dropping tariffs on European steel while further expanding tariffs on goods such as EVs and semiconductors from China, resulting in more tax revenue being collected from tariffs under Biden than under the first Trump administration.
The Republican Party was strongly pro-tariff from the days of Abraham Lincoln until the Cold War. Republicans passed record high tariffs in the 1920s and early 1930s, which were widely blamed for worsening the Great Depresssion. Donald Trump has argued that the GOP betrayed its roots by becoming in favor of free trade and has cited William McKinley in particular as an influence on his anti-free trade views. Trump adopted his current views on trade issues in the 1980s, saying Japan and other nations were taking advantage of the United States. During the 2016 presidential campaign, Trump repeatedly favored policy proposals that renegotiate trade agreements for the United States. His chief trade advisor during the campaign was Peter Navarro, who favored the use of tariffs, especially against China. During a meeting with the New York Times Editorial Board in January 2016, Trump said he would tax Chinese imports into the United States by 45%. Trump frequently criticized the North American Free Trade Agreement, calling it "the worst trade deal the U.S. has ever signed". He also called Trans-Pacific Partnership "the death blow for American manufacturing" and said it would "put the interests of foreign countries above our own".
On November 21, 2016, in a video message, Trump introduced an economic strategy of "putting America first", saying he would negotiate "fair, bilateral trade deals that bring jobs and industry back on to American shores". On January 23, 2017, three days after becoming president, Trump withdrew the United States from the politically divisive Trans-Pacific Partnership believing the agreement would "undermine" the U.S. economy and sovereignty.
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Tariffs in the first Trump administration
Tariffs during the first presidency of Donald Trump involved protectionist trade initiatives against other countries, most notably China. It principally involved tariffs on foreign imports imposed by Donald Trump, the 45th president of the United States. Since long before he became president in 2017, Trump had promoted tariffs on imports to retaliate against countries he believes are "ripping-off" the United States. Trump has insisted that foreign nations pay the tariffs he imposes; however, several economists say the reality is that American importers pay them.
In January 2018, Trump imposed tariffs on solar panels and washing machines of 30–50%. In March 2018, he imposed tariffs on steel (25%) and aluminum (10%) from most countries, which, according to Morgan Stanley, covered an estimated 4.1% of U.S. imports. In June 2018, this was extended to the European Union, Canada, and Mexico. The Trump administration separately set and escalated tariffs on goods imported from China, leading to a trade war.
Trading partners implemented retaliatory tariffs on U.S. goods. In June 2018, India planned to recoup trade penalties of $241 million on $1.2 billion worth of Indian steel and aluminum, but attempted talks delayed these until June 2019 when India imposed retaliatory tariffs on $240 million worth of U.S. goods. Canada imposed matching retaliatory tariffs on July 1, 2018. China implemented retaliatory tariffs equivalent to the $34 billion tariff imposed on it by the U.S. In July 2018, the Trump administration announced it would use a Great Depression-era program, the Commodity Credit Corporation (CCC), to pay farmers up to $12 billion, increasing the transfers to farmers to $28 billion in May 2019. The USDA estimated that aid payments constituted more than one-third of total farm income in 2019 and 2020.
Tariff negotiations in North America were relatively more successful, with the U.S. lifting the steel and aluminum tariffs on Canada and Mexico on May 20, 2019, joining Australia and Argentina in being the only nations exempted from the regulations. However, on May 30, Trump unilaterally announced his intention to impose a five percent tariff on all imports from Mexico beginning on June 10, with tariffs increasing to 10% on July 1, and by another 5% each month for three months, "until such time as illegal migrants coming through Mexico, and into our Country, STOP", adding illegal immigration as a condition for U.S.-Mexico tariff negotiations. The move was seen as threatening the ratification of the United States–Mexico–Canada Agreement (USMCA), the North American trade deal set to replace the North American Free Trade Agreement (NAFTA). The tariffs were averted on June 7 after negotiations.
A May 2019 analysis conducted by CNBC found Trump's tariffs are equivalent to one of the largest tax increases in the U.S. in decades. Studies have found that Trump's tariffs reduced real income in the United States, as well as adversely affecting U.S. GDP. Some studies also concluded that the tariffs adversely affected Republican candidates in elections. A study found that political donations had a notable impact on the likelihood of tariff exemptions.
President Trump's successor, President Biden, kept most of the tariffs in place, dropping tariffs on European steel while further expanding tariffs on goods such as EVs and semiconductors from China, resulting in more tax revenue being collected from tariffs under Biden than under the first Trump administration.
The Republican Party was strongly pro-tariff from the days of Abraham Lincoln until the Cold War. Republicans passed record high tariffs in the 1920s and early 1930s, which were widely blamed for worsening the Great Depresssion. Donald Trump has argued that the GOP betrayed its roots by becoming in favor of free trade and has cited William McKinley in particular as an influence on his anti-free trade views. Trump adopted his current views on trade issues in the 1980s, saying Japan and other nations were taking advantage of the United States. During the 2016 presidential campaign, Trump repeatedly favored policy proposals that renegotiate trade agreements for the United States. His chief trade advisor during the campaign was Peter Navarro, who favored the use of tariffs, especially against China. During a meeting with the New York Times Editorial Board in January 2016, Trump said he would tax Chinese imports into the United States by 45%. Trump frequently criticized the North American Free Trade Agreement, calling it "the worst trade deal the U.S. has ever signed". He also called Trans-Pacific Partnership "the death blow for American manufacturing" and said it would "put the interests of foreign countries above our own".
On November 21, 2016, in a video message, Trump introduced an economic strategy of "putting America first", saying he would negotiate "fair, bilateral trade deals that bring jobs and industry back on to American shores". On January 23, 2017, three days after becoming president, Trump withdrew the United States from the politically divisive Trans-Pacific Partnership believing the agreement would "undermine" the U.S. economy and sovereignty.