So far, President Donald Trump’s trade wars aren’t going very well.
Last fall, he reached an agreement with Mexico and Canada to replace the North American Free Trade Agreement with a new agreement. But the deal has not been ratified by Congress and with Democrats now controlling the House of Representatives, it could be awhile before it’s approved.
Trump still doesn’t have a trade deal with Europe. Last summer, he and European Commission president Jean-Claude Juncker said they had reached an agreement, but there still is no actual new trade deal between them. U.S. and European trade negotiators are still at odds, according to a recent New York Times report. The Trump administration wants agricultural trade barriers removed by Europe, which is reluctant to do so.
Trump’s tariffs on steel and aluminum from the European Union remain and Europe responded with retaliatory tariffs, including tariffs on motorcycles that caused Milwaukee-based Harley-Davidson Inc. to shift more production overseas to get around them. Trump has threatened to impose tariffs on European cars and auto parts, but has held off, for now.
Meanwhile, trade negotiations between the U.S. and China are continuing and reports indicate Trump is eager to get a deal done. Last year, Trump implemented tariffs on numerous Chinese goods and China instituted retaliatory tariffs. America’s biggest trade imbalance, by far, is with China, which has also long been criticized by the U.S. for intellectual property theft.
Wisconsin’s economy needs these trade wars to come to a beneficial ending as soon as possible. The tariffs have hurt dairy farmers in the state who were already struggling to stay afloat with rock bottom milk prices, and soybean farmers have suffered huge sales declines as a result of Chinese tariffs.
The continued escalation of trade tensions with China and other countries could cost the United States more than 2.2 million jobs, including a projected net loss of 37,344 jobs in Wisconsin, according to data from advocacy group Tariffs Hurt the Heartland.
The U.S. trade deficit hit a 10-year high of $621 billion in 2018, and the U.S. trade gap in goods rose to an all-time high of $891.3 billion last year.
Reducing the U.S. trade deficit was a major pledge of Trump’s when he ran for office. He has said his use of tariffs will result in short-term pain, but long-term benefits from better trade deals.
U.S. economic growth appears to be slowing. The nation’s gross domestic product surged by 4.2 percent in the second quarter of 2018, then rose by 3.4 percent in the third quarter and 2.6 percent in the fourth quarter. It’s projected to rise by only 0.2 percent in the first quarter of this year, according to the Atlanta Federal Reserve.
Even with all of the controversy surrounding the president, the economy and trade deals could be his biggest concern for re-election in 2020.
