Price on Trade: Expect Trump 2.0 to build upon Trump 1.0

After a frenzied election cycle, Donald Trump will return to the White House with an amplified trade agenda. In the campaign’s final days, then-candidate Trump mused about imposing 500% tariffs on Mexican automobiles, making European exporters “pay a big price,” and replacing the income tax with tariffs. Though some of these proposals may be negotiation posturing, the second Trump administration will once again use available trade tools aggressively to accomplish economic, diplomatic, and national security objectives. As campaign rhetoric crystallizes into executive action, a comprehensive trade agenda will come into sharper focus.

The second Trump Administration will likely double down on trade tools used during the first administration and deploy the International Emergency Economic Powers Act and other tools in new and creative ways. During the campaign, the president-elect suggested his administration would impose tariffs of at least 60% on all Chinese goods and 10-20% blanket tariffs on imports from all other countries. President-elect Trump has indicated that duties may be used to pressure China on unfair trade practices, force Mexico to stem migration and Chinese transshipment, and generally narrow the US trade deficit. Because these actions do not require Congressional action, the administration is likely to move early and boldly to deploy its existing trade authorities.