Trade

Trade policy determines the rules under which American goods, services, and capital cross borders. The U.S. is the world's largest economy and a major trading power, importing and exporting trillions of dollars annually. Trade agreements — from NAFTA (replaced by USMCA in 2020) to the Trans-Pacific Partnership (which the U.S. withdrew from in 2017) to bilateral deals with individual countries — set tariff rates, intellectual property protections, labor standards, and investment rules. Tariffs are the central tool of trade disputes: a tax levied on imported goods, paid by the importer (and typically passed to consumers). The Trump administration imposed sweeping tariffs in both its first and second terms — including a broad 10 percent baseline tariff on all imports and targeted tariffs of 25 percent or more on steel, aluminum, and goods from China — arguing they protect American manufacturing and generate revenue. Critics, including most mainstream economists, argue tariffs raise consumer prices, invite retaliation, and disrupt supply chains without meaningfully restoring manufacturing jobs. China is both the U.S.'s largest goods import source and a major strategic rival; trade with China is intertwined with national security debates over technology transfer, semiconductor access, and economic dependence. The World Trade Organization (WTO) provides a global framework for trade rules and dispute resolution, though the U.S. has increasingly bypassed it through bilateral and regional agreements.