MAGA-‘Making America Great Again’ is a campaign slogan, frequently used in American Politics. Coined by President Regan in his election campaign in 1980, this slogan had later been popularized by Donald Trump in his election campaigns in 2016 with an aim to replicate the success of the earlier President.
But the question is what policies and what instruments is MAGA comprised of? Is Protectionism also a part of it? Were Trade wars also a part of the plan?
Reflecting upon the major breakout policies this article talks about President Trump’s trade war with the world involving multiple battles with the US allies and the others alike.
A TIMELINE OF US’ PROTECTIONIST POLICIES SINCE PRESIDENT TRUMP’S SESSION:
BATTLE NO. 1- KORUS
The US-Korea free trade agreement which directly involved approximately 362 million consumers was envisioned to eliminate 95% of both the nation’s tariffs on goods for a period of five years. President Trump hinted to withdraw from the agreement only to later bent down the policy in America’s favor.
The terms of the new policy include:
- An increase of annual U.S. auto exports from 25,000 vehicles to 50,000 that are only required to meet U.S. safety regulations instead of South Korean regulations.
- A cap will also be placed on steel exports from South Korea to the United States, though South Korea will remain exempt from the 25% steel tariff the Trump administration placed on most other nations
BATTLE NO. 2- TRANS PACIFIC PARTNERSHIP (TPP)
- TPP, a deal aimed to lower tariffs among 12 different signatories which included countries like US, Japan, Vietnam, Australia, and others was mainly an attempt to counter rising Chinese influence in the region.
- On 23rd January 2017, the Trump administration withdrew from the treaty while other 11 countries decided to go ahead with the policy without the United States.
- Speaking at the World Economic Forum, on January 25, 2018, Trump said, “I would do TPP if we were able to make a substantially better deal. The deal was terrible; the way it was structured was terrible. If we did a substantially better deal, I would be open to TPP”
BATTLE NO. 3- THE U.S. v/s CHINA
January 23, 2018
- President Trump placed a 30% tariffs on foreign solar panels (mainly imported from China)
- On the same day, a 20% tariff was also placed on the first 1.2 million units of washing machines that were being imported by the US.
April 3, 2018
- Trump announced 25% tariffs on goods worth 50 Billion Dollars that were being exported by China. These products consisted of electronics items, aerospace, and machinery.
April 6, 2018
- Trump administration again announced tariffs on 100 Billion Dollars worth of Chinese imports which constituted approximately one-third of China’s exports to the US.
July 6, 2018
- China officially responded to a new trade policy initiated by the US whereby the Trump administration imposed a 25% tariff on 34 Billion Dollars worth of imports (From China).
BATTLE NO. 4- THE U.S. v/s EUROPEAN UNION
- The US administration imposed a 25% import tariff on steel and 10% on aluminum for all its trading partners including close allies like EU and Canada.
- According to a PIIE study, Trump’s steel tariffs have raised the price of steel products by an average of 9% that had led to the creation of around 8900 jobs in the US. However, steel users had to pay an extra 650,000 Dollars for every job created.
BATTLE NO. 5- THE U.S. v/s INDIA
- The US complaints at the WTO: Washington filed a complaint at the WTO about the several export subsidy programs that were running in India. These included the Merchandise Exports from India Scheme, the Export Oriented Units Scheme, the Electronics Hardware Technology Parks Scheme, Special Economic Zones, and the Export Promotion Capital Goods Scheme.
- Trump’s frustration over higher import tariffs by India: President Trump’s administration had expressed its dissatisfaction and wanted India to reduce its import tariffs on Harley-Davidson motorcycles from 100%
- Removal of India from the GSP: The Trump administration ended a key trade agreement with India after accusing the latter’s Government of imposing unnecessary barriers to trade. Around 5.6 Billion Dollars of Indian goods which enjoyed duty-free entry into the US borders were kicked out of this 19 Billion Dollar Trade agreement.
The world has witnessed how Trump has lashed out against Globalization in his speeches and tweets. His actions of appointing famous protectionist trade litigator Robert Lighthizer to be US Trade Representative and ripping apart trade agreements justifies his approach towards winning American hearts to stay longer in the race of American politics.
But this approach wasn’t an original component of the MAGA! The Trump administration needs to understand that twenty-first-century Globalization is more knowledge led than trade led. Imposing trade tariffs and closing trade agreements will turn the US into a high-cost island for industrial inputs which will be detrimental to the economy in the longer run.
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