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The U.S. Is Fighting a 21st Century Trade Battle Armed With a 1930s Mindset

undefined and Senior Global Analyst at RANE

Matthew Bey

Senior Global Analyst at RANE, Stratfor

Jan 31, 2019 | 10:00 GMT

U.S. President Donald Trump holds a tariff table as he speaks in the Cabinet Room of the White House on Jan. 24, 2019. Reducing tariffs might play well to the gallery, but it's not the be-all and end-all of a trade battle.

(MANDEL NGAN/AFP/Getty Images)

Highlights

The United States may score some successes in persuading its trade partners to reduce their tariffs, but its current strategy fails to address the fact that tariffs are not the biggest limiters of U.S. exports.
Ultimately, nontariff barriers such as health and safety regulations and intellectual property rights present greater obstacles to trade in the contemporary world than tariffs do.
With the United States focused on tariffs, its exporters could soon face greater difficulties as competitors in Canada, the European Union, Asia and elsewhere gain access to more markets thanks to comprehensive free trade deals that eliminate more important nontariff barriers.

Can turning back the clock to the 1930s achieve a 21st-century trade win? That might be the question on everyone's lips as the White House aims to significantly increase the president's authority over U.S. tariffs by asking Congress during next week's State of the Union address to pass the Reciprocal Trade Act. But the push by the administration of U.S. President Donald Trump for increased trade barriers has spurred the rest of the world to strive for comprehensive agreements that avoid dallying on tariffs in favor of addressing more significant nontariff barriers. All of it begs the question: By focusing simply on bilateral trade balances, tariffs and obstructing imports, does the United States risk losing out as the rest of the world surpasses it in terms of trade? ...

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