The First Term of Tariffs

During his 2016 presidential campaign, Donald Trump made trade policy a central issue, positioning himself as a fierce advocate for American industries and a critic of globalization. He argued that previous administrations had negotiated trade agreements that harmed American workers, particularly in manufacturing and agriculture, and pledged to use tariffs as a means of correcting these imbalances. His promise to impose tariffs, renegotiate existing trade deals, and confront China’s trade practices resonated with many voters, particularly in the industrial Midwest, and became a hallmark of his economic agenda.

Upon taking office in January 2017, Trump began implementing his vision of protectionist trade policies, marking a significant shift from the free-trade approach that had dominated U.S. policy for decades. He quickly withdrew the United States from the Trans-Pacific Partnership (TPP), a proposed trade deal involving 12 countries, which he argued would have led to further outsourcing of American jobs. While the TPP was largely abandoned, its other members proceeded without the U.S., forming the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

The most significant aspect of Trump’s trade policy was the imposition of tariffs, particularly targeting steel, aluminum, and Chinese imports. In March 2018, the administration invoked Section 232 of the Trade Expansion Act of 1962 to impose tariffs of 25% on steel and 10% on aluminum imports, citing national security concerns. These measures affected imports from major trading partners, including Canada, Mexico, the European Union, and China. The move sparked immediate backlash from affected countries, leading to retaliatory tariffs on American exports, particularly agricultural products such as soybeans, pork, and dairy.

Trump’s most aggressive tariff actions were aimed at China, which he accused of engaging in unfair trade practices, including intellectual property theft, forced technology transfers, and currency manipulation. Following an investigation under Section 301 of the Trade Act of 1974, the U.S. imposed tariffs on $50 billion worth of Chinese goods in mid-2018. These tariffs escalated over time, ultimately covering approximately $360 billion in imports. China responded with its own tariffs on U.S. goods, particularly targeting key American industries such as agriculture, automotive manufacturing, and technology.

The trade war with China led to a period of economic uncertainty, with global markets experiencing volatility as businesses adjusted to the new trade barriers. While Trump argued that the tariffs would force China to make structural reforms to its economy, critics contended that they placed undue strain on American businesses and consumers. Many U.S. manufacturers that relied on Chinese imports faced higher costs, which were either absorbed by businesses or passed on to consumers in the form of price increases.

One of the most heavily impacted sectors was agriculture. China, historically one of the largest purchasers of U.S. agricultural products, drastically reduced its imports of American soybeans and other farm goods in response to U.S. tariffs. This led to a sharp decline in farm incomes, prompting the Trump administration to authorize billions of dollars in federal aid to farmers affected by the trade war. Despite these efforts, many in the agricultural sector viewed the tariffs as a costly and disruptive policy.

Beyond China, Trump’s tariffs also led to tensions with key U.S. allies. Canada and Mexico, both major suppliers of steel and aluminum to the U.S., were hit with tariffs, prompting retaliatory measures. The European Union also responded with tariffs on American products, including whiskey, motorcycles, and agricultural goods. The escalating trade conflicts forced the administration to negotiate exemptions and temporary agreements to mitigate the damage.

In 2019, Trump secured a renegotiation of the North American Free Trade Agreement (NAFTA), a deal he had long criticized as unfair to American workers. The result was the United States-Mexico-Canada Agreement (USMCA), which introduced new labor protections, stricter rules on automobile manufacturing, and provisions for digital trade. While USMCA was widely regarded as an improvement over NAFTA, it retained much of the original framework, leading some critics to argue that it was not the sweeping overhaul Trump had promised.

The effects of Trump’s tariffs on the U.S. economy were mixed. While some domestic industries, such as steel and aluminum manufacturing, benefited from reduced foreign competition, others faced increased costs due to higher prices on imported raw materials. Many economists pointed out that the tariffs functioned as a tax on American consumers and businesses, leading to higher prices on goods ranging from household appliances to automobiles. Additionally, businesses that relied on global supply chains were forced to navigate new logistical and financial challenges, further complicating the economic landscape.

Despite these challenges, Trump remained committed to his tariff policies throughout his first term. In early 2020, his administration reached a partial agreement with China known as the "Phase One" trade deal. Under this agreement, China pledged to increase its purchases of American goods, particularly agricultural products, while the U.S. agreed to reduce some of the tariffs. However, the deal did not address many of the core issues that had prompted the trade war, such as intellectual property protections and industrial subsidies.

As Trump campaigned for re-election in 2020, he continued to defend his tariff policies, arguing that they had strengthened American manufacturing and forced other countries to engage in fairer trade practices. However, the COVID-19 pandemic shifted economic priorities, as global supply chain disruptions and domestic economic challenges took center stage. While tariffs remained a key component of Trump’s economic strategy, their impact became intertwined with broader concerns about economic recovery and public health.

In the years following Trump’s presidency, his tariff policies have remained a topic of debate. The Biden administration has largely maintained many of the tariffs imposed on China, using them as leverage in ongoing trade negotiations. However, there has been some effort to ease tensions with allies by rolling back certain tariffs and exploring alternative trade strategies.

Trump’s approach to tariffs represented a significant departure from the free-trade policies that had characterized previous administrations. While his actions reshaped global trade dynamics and forced conversations about fair trade, they also led to economic disruptions and strained relations with key trading partners. The long-term effects of his tariff policies continue to unfold, as businesses and policymakers navigate a trade landscape that remains deeply influenced by his presidency.

As Trump re-entered office in 2025, his administration doubled down on tariffs, implementing new measures targeting Canada, Mexico, and China. He imposed a 25% tariff on imports from Canada and Mexico, along with a 10% tariff on Chinese goods, citing concerns over illegal immigration and trade imbalances. These new tariffs sparked fresh trade tensions and prompted retaliatory measures from affected countries, further complicating the global economic environment. The economic ramifications of these policies remain to be seen, but they signal a continuation of Trump’s protectionist trade philosophy.

In conclusion, Trump’s first-term tariff policies marked a dramatic shift in U.S. trade policy, with far-reaching consequences for industries, consumers, and global economic relations. While they achieved some of their intended goals, such as renegotiating trade agreements and pressuring China, they also introduced new economic uncertainties and challenges. As the debate over tariffs continues, Trump’s legacy on trade remains a defining aspect of his presidency, shaping discussions on economic policy for years to come.