On his first day in office, President Donald Trump signed a flurry of executive orders. Among them was the ‘America First’ trade policy. This policy puts the American economy, workers, and national security first. The directive ordered federal agencies to review any unfair trade practices and agreements by other countries and recommend actions to be taken under the relevant US laws. The order sets a tight timeline of 1st April 2025 to review unfair trade practices and agreements, manipulation of exchange rates on the US currency, anti-dumping and countervailing laws and export controls, among others. 

Reeling towards tariff wars

The strategy used by President Trump in implementing the America First trade policy includes threats to impose trade tariffs. Specific targets for tariff imposition include China, Canada and Mexico (he has already announced plans to introduce a general 10%, 25% and 25% tariff, respectively, by 1st February). Trump has targeted Canada and Mexico for the fentanyl crisis in the US and the illegal flow of migrants. For China, the threat to impose the tariff is also meant to force the country to halt trafficking of fentanyl into the United States. 

Colombia also fell victim to the US tariff threat for the failure to accept deportees. However, within a day, the South American country accepted its nationals. 

Although such moves give the impression that the strategies implored by the US are working, they have ripple effects on international trade. For example, the US relies heavily on imports from Canada and Mexico for its automotive industry, whereas most of Colombia’s exports come from the United States. The sobering fact is that threats of tariffs will not only hurt other countries but also fail to put the American economy first. Price commodities will rise, forcing the Americans whom President Trump seeks to protect to dig deeper into their pockets.

US-China trade relations

Trump’s executive order contains several instructions specifically dealing with trade relations between the US and China. This is in addition to the directives given to the Secretary of Commerce to assess the unlawful flow of fentanyl from the US. It contains general instructions to review all acts, policies and practices that cause undue burden to the US economy. Further, the directive calls for the assessment and reciprocity of intellectual property rights and balanced treatment between the two countries. Proposed additional tariffs will be imposed in the event the review of policies and acts reveals unfair trade practices. 

The war between the two countries is a contest for power in all aspects possible, including trade and the rising competition in technology. The two countries each seek to be the global leader, and their relations not only affect their citizens but the world at large.

‘America First’ vs international trade

Virtually addressing this year’s World Economic Forum in Davos, Switzerland, President Trump stated, “My message to every business in the world is very simple: Come make your product in America, and we will give you among the lowest taxes of any nation on Earth. But if you don’t make your product in America, which is your prerogative, then, very simply, you will have to pay a tariff.”

Clearly, President Trump aims to renegotiate bilateral agreements that will be favourable to the US.  While this strategy may seem to work, the rest of the world may likely seek partnerships that exclude the US. The proposed unilateralism will be a disaster as opposed to a success story; American workers may be declared redundant, and American farmers may lack access to markets for its products. 

For now, Trump has to either kick down the can or reconsider his America First Trade Policy.  Meanwhile, the rest of the world is watching while considering retaliatory measures come 1 April 2025.