Trump’s Second Term: Trade Wars, Tariffs, and Tumultuous Ties with China
On January 20th, 2025, President Donald J. Trump was sworn in for his second term. This time, President Trump has proposed many ideas and plans, some of which could negatively impact our international relationships and potentially weaken the nation. One of the biggest problems arises from his recommended approach to U.S.-China relations. Trump has taken a lot of inspiration from the Gilded Age, a time when the United States built its economy, and with that inspiration, he plans to bring forward nationalist and protectionist ideologies and heavily focus on boosting U.S. manufacturing. Since his first term in 2016, Trump has consistently voiced his desire to end U.S. reliance on nations like China, upon which many American companies depend for goods and components.
To achieve this, Trump has been aiming to implement a 60% tariff on most Chinese imports. This is an extreme measure that he plans to take and a big goal for him, which is aimed at prioritizing U.S. economic interests over maintaining and growing international relations. His nationalist mindset has also led him to go on a U.S. protectionism journey, issuing executive orders that assert U.S. supremacy; his orders include plans like regaining control over the Panama Canal and renaming the Gulf of Mexico to the Gulf of America. Similar to his policies in his first term, Trump plans to have tariffs targeted at key industries such as steel, aluminum, and technology. These measures are designed to shield domestic markets from foreign competition, particularly in sectors struggling to compete with these cheaper imports from countries like China (this includes Mexico and Canada). These companies are doing something illegal called dumping, that is when a company, in this case the Chinese steel exporters, are sending their product to another country, America in our case, and selling the product at values below another countries cost of production.
Trump’s plan can end up being disastrous because the U.S. doesn't have the industry put into place to keep up with the high demands of manufacturing that places like China, Canada, and Mexico were providing. Additionally, we don't have the labor to keep up with the high demands. Since the U.S. can't keep up with these demands, China is slowly gaining a monopoly in these industries. China now has control over 50% of steel exports and 60% from US exports. In 2018, when President Trump implemented a tax on the steel industry, the price of steel rose a lot, and this put U.S. manufacturers and exporters at a great disadvantage as they competed with foreign companies. Trump may argue that tariffs on steel led to an increase of ~1,000 jobs in steel production, but if we look at the manufacturing industry that relied on this steel, we can see that Trump’s tariff actually caused a loss of ~75,000 jobs because of high steel prices. Industries (like automobile, construction, and large scale manufacturing) that currently rely on foreign nations are also impacted heavily. We can see that when there was an increased tariff on imported components, like auto parts, the industries in the U.S. that used those products experienced increased costs due to the tariffs. For example, This year, he proposed a tariff of 25% on Canada’s and Mexico’s imports of auto parts. The tax is anticipated to increase vehicle prices by an average of $3,000, and could negatively impact both manufacturers and consumers. Besides focusing on industrial goods, Trump believes medicines like penicillin should be made in the U.S. instead of being imported to reduce dependency on foreign supply chains for critical healthcare needs.
Trump’s policies have also led to other negative impact on the U.S. economy. In response to U.S. tariffs on Chinese goods, China implemented retaliatory tariffs, primarily targeting the agricultural sector, ranging from 5% to 25% on a $110 billion worth of U.S. exports, including soybeans, pork, and other agricultural products. To mitigate the losses the farmers had, the Trump administration authorized $28 billion in bailout payments through the Market Facilitation Program in 2018 and 2019.
While we can see that Trump’s policies have had negative economic impacts, they may also have some benefits. Even though Trump's tax policies in the past didn't seem to end well, and put the United States in a bad trade deficit, we need to acknowledge the benefits. We have seen that in the past and currently preventing some trade and implementing tariffs is to counter China to stop smuggling Fentanyl into the U.S. via Mexico and Canada. All being said, if Trump takes these next four years to learn from his mistakes and executes his policy correctly, manufacturing in the United States could increase, analogous to its massive rise in the Gilded Age.
Ultimately, Trump’s suggested policies represent a polarizing vision for America’s future. While many Americans think that his protectionist ideologies are good, his success centers around careful execution and the ability to balance economic nationalism with global collaboration. Only time will tell whether these measures strengthen the U.S. economy or lead to unintended consequences.
