TRUMPONOMICS:

The result has been disastrous. Trade relations between the US and its major international partners are now fraught. The global growth rates of both trade and GDP have fallen sharply, and growth projections are being downgraded as further evidence of the economic damage caused by US trade policies comes to light.

One early step by the Trump administration was to impose a 25% tariff on imported steel and a 10% tariff on aluminum. This policy hurt Canada, the European Union, Mexico, and Japan - all US friends or allies - but not China, which accounted for only 2% of US steel imports at the time. It is estimated that the metal tariffs have cost Americans $900,000 per year per job "saved." Worse, US employment in steelmaking has continued to decline, and US steel exports have remained flat since the tariffs were introduced in early 2018.

Since then, Trump bullied Canada and Mexico into renegotiating the North American Free Trade Agreement, which has now been replaced by the US-Mexico-Canada Agreement. The revised deal tightens US regulations on imports of automobiles and auto parts, and requires that 40-45% of Mexican auto workers be paid at least $16 per hour by 2023. For comparison, that is tantamount to introducing a pay floor for US autoworkers of more than $75 per hour - obviously an unthinkable proposition.

The Trump administration has also forced a "renegotiation" of the South Korea-US Free Trade Agreement, with the main result being to restrict imports of steel from South Korea and to prolong a US tariff on imported light trucks.

And then there is the Trans-Pacific Partnership, which the Obama administration negotiated with 11 other Pacific Rim countries (excluding China) and signed on February 4, 2016. Immediately upon taking office, Trump withdrew America from the TPP, leaving the remaining signatories to salvage the deal, which they have done under Japanese leadership. As a result, US exports to those countries are now subject to much higher tariffs than is trade among the remaining 11 members.

Then came Trump's trade war against China, which has both undercut global trade and brought the bilateral relationship to its lowest point since the aftermath of the 1989 Tiananmen Square massacre. Even with the "phase one" agreement that has just been signed, the average US tariff on imports from China will be around 19%, up from 3% before the trade war. Worse, the US has gained little from the process. Yes, the latest deal includes a Chinese commitment to import more US agricultural and other products. But to represent a "gain," those additional purchases would have to be great enough to compensate for the lost exports of 2018-19.

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