Trump's trade policy: pushing back against China
Although not akin to the protectionist policies practiced by the United States through the 1930s, the trade war launched by the Trump administration since early 2018 challenges the principles and institutions of free trade.
The taxes and barriers currently put in place correspond to certain exceptional legal provisions in the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO) texts and rely on US trade laws predating the WTO. Trump’s trade policy enjoys a level of bipartisan consensus in the country today, centered around the idea of improving the conditions of trade with partners while hampering the growing power of China.
The "optimal tariff" theory explains the benefits for great economic powers such as the US of high customs duties, as a lever to compel trade partners to open their domestic markets or to renounce economic policies considered harmful to US interests. President Trump thus imposed the renegotiation of regional agreements such as the North American Free Trade Agreement (NAFTA) and the United States-Korea Free Trade Agreement (KORUS). He also favors the negotiation of bilateral or regional agreements rather than the global mechanisms of the WTO, which he denounces.
Despite the hype, the consequences of this American-led return of protectionism could in fact remain modest for the World economy and even for international trade. In the case of the European Union (EU), where trade negotiators seem to be holding their ground in the face of Trump’s demands, the reduction of US-China trade could allow an increase of exports to the US. Above all, sorting out China’s fraudulent commercial practices and reforming WTO rules, as required by president Trump, would ultimately be a very positive step forward.
The return of tariffs and the proliferation of non-WTO trade agreements, however, remain contrary to the philosophy of openness that presided over international economic relations from 1945 to this day. Ultimately, two parallel trading systems – an American one and a Chinese one – could emerge.
Taken by surprise, China has yet to elaborate a clear response to what is certainly a challenge to its desire to expand its economic and commercial power around the world. China’s reaction will be decisive.
This content is available in French : "La politique commerciale de Trump : faire reculer la Chine"
Author(s)
Related centers and programs
Discover our other research centers and programs
Center for Asian Studies
Asia is a nerve center for multiple global economic, political and security challenges. The Center for Asian Studies provides documented expertise and a platform for discussion on Asian issues to accompany decision makers and explain and contextualize developments in the region for the sake of a larger public dialogue.
The Center's research is organized along two major axes: relations between Asia's major powers and the rest of the world; and internal economic and social dynamics of Asian countries. The Center's research focuses primarily on China, Japan, India, Taiwan and the Indo-Pacific, but also covers Southeast Asia, the Korean peninsula and the Pacific Islands.
The Centre for Asian Studies maintains close institutional links with counterpart research institutes in Europe and Asia, and its researchers regularly carry out fieldwork in the region.
The Center organizes closed-door roundtables, expert-level seminars and a number of public events, including an Annual Conference, that welcome experts from Asia, Europe and the United States. The work of Center’s researchers, as well as that of their partners, is regularly published in the Center’s electronic journal Asie.Visions.
Find out more
Discover all our analyses
Sri Lanka’s NPP Government. From System Change to Structural Compliance
In September 2024, a relative outsider to Sri Lanka’s two-party-dominated political system, Anura Kumara Dissanayake, won the presidential elections. The anti-establishment, populist movement he represented, the National People’s Power (NPP), went on to receive an overwhelming mandate in the November 2024 general elections, winning 159 seats in a 225-member parliament.
Japan Under Trump: Alliance Strains, the Push for Autonomy and Essential Partnerships
Japan is under pressure from the United States (US) on punitive tariffs and demands for increased defence spending. This has sparked deep concern over US credibility and triggered growing domestic calls for greater autonomy.
Quest for Strategic Autonomy? Europe Grapples with the US - China Rivalry
Building on the 2020 European Think Tank Network on China (ETNC) report, which assessed Europe’s positioning amid the strategic rivalry between the United States and China, this edition re-examines the geopolitical landscape in light of the Covid-19 pandemic, Russia’s war in Ukraine and Donald Trump’s return to the White House. This report features 22 national chapters and one dedicated to the EU, analysing the evolution of Europe’s relations with Washington and Beijing, the range of approaches to dealing the US-China rivalry and how these are expected to evolve.
France seeks third way between US and China in Southeast Asia
The French leader sent a message of partnership but gave few concrete details on sustained engagement plans.