Trade policy has experienced significant upheaval under President Donald Trump's reciprocal tariffs, which are sure to cause turmoil for global businesses and conflict with America's allies and adversaries. Richard Mojica, a trade attorney at Miller & Chevalier, notes that Trump is overturning decades of rules governing international commerce. This new approach will necessitate adjustments on all sides. Trump cites persistent U.S. trade deficits - not since 1975 has America sold the rest of the world more than it bought from them - as justification for his decision to impose retaliatory tariffs. The president and his advisers see this move as a means of offsetting foreign practices that they consider barriers to American exports, including subsidies, false health regulations, and intellectual property theft. However, there are numerous issues with Trump's plan. One major problem is that the higher tariffs he complains about weren't sneakily adopted by foreign countries - the United States agreed to them after years of complex negotiations involving 123 nations. As part of a trade pact known as the Uruguay Round, they were allowed to set their own duties on different products but couldn't charge one country more than another. Furthermore, despite Trump's claims that steeper tariffs would help reverse America's long-standing trade deficits, tariffs haven't proven successful at narrowing the gap. The U.S. trade deficit rose last year to $918 billion - second-highest on record. A UCLA economist and former Treasury official named Kimberly Clausing notes that the imbalance comes from a lack of desire to save and tax. Until these issues are resolved, we'll keep running a trade deficit. Finally, Trump's plan goes beyond foreign countries' tariffs by fighting with the European Union and other trading partners over value-added taxes, known as VATs. Most economists disagree with him on this point because VATs are applied to domestic and imported products alike - they don't specifically target foreign goods and haven't traditionally been seen as a trade barrier.?

Trade policy has experienced significant upheaval under President Donald Trump's reciprocal tariffs, which are sure to cause turmoil for global businesses and conflict with America's allies and adversaries. Richard Mojica, a trade attorney at Miller & Chevalier, notes that Trump is overturning decades of rules governing international commerce. This new approach will necessitate adjustments on all sides. Trump cites persistent U.S. trade deficits - not since 1975 has America sold the rest of the world more than it bought from them - as justification for his decision to impose retaliatory tariffs. The president and his advisers see this move as a means of offsetting foreign practices that they consider barriers to American exports, including subsidies, false health regulations, and intellectual property theft. However, there are numerous issues with Trump's plan. One major problem is that the higher tariffs he complains about weren't sneakily adopted by foreign countries - the United States agreed to them after years of complex negotiations involving 123 nations. As part of a trade pact known as the Uruguay Round, they were allowed to set their own duties on different products but couldn't charge one country more than another. Furthermore, despite Trump's claims that steeper tariffs would help reverse America's long-standing trade deficits, tariffs haven't proven successful at narrowing the gap. The U.S. trade deficit rose last year to $918 billion - second-highest on record. A UCLA economist and former Treasury official named Kimberly Clausing notes that the imbalance comes from a lack of desire to save and tax. Until these issues are resolved, we'll keep running a trade deficit. Finally, Trump's plan goes beyond foreign countries' tariffs by fighting with the European Union and other trading partners over value-added taxes, known as VATs. Most economists disagree with him on this point because VATs are applied to domestic and imported products alike - they don't specifically target foreign goods and haven't traditionally been seen as a trade barrier.?