Introduction
A potential second term for former President Donald Trump could significantly impact global trade dynamics. His trade policies, characterized by protectionist measures, aim to reshape international trade relationships. Throughout his 2024 presidential campaign, Trump has proposed various strategies, including raising tariffs and initiating new trade wars. These proposals suggest potential changes in the global trade environment if Trump returns to the White House.
Trump’s Trade Priorities
Trump focuses on protectionism. He has suggested raising tariffs on all imports by 10%, on imports from China by 60%, and implementing reciprocal tariffs. These measures aim to reduce the U.S. trade deficit, which reached a record $951 billion in 2023. Moreover, Trump’s administration could push for more aggressive trade measures with fewer internal disputes, as his cabinet might align more closely with his protectionist views.
Impact on the U.S. Economy
Implementing broad tariffs could have severe economic consequences. The American Action Forum estimates that a 10% tariff on all imports, combined with likely retaliatory measures, would reduce U.S. GDP by $62 billion. Additionally, the Center for American Progress Action Fund estimates that this tariff plan would cost a typical U.S. household $1,500 annually. Thus, while Trump’s tariffs aim to protect domestic industries, they could also lead to significant economic challenges.
Targeting China
Trump’s trade policies heavily target China. He has proposed 60% tariffs on Chinese imports, which would further strain U.S.-China trade relations. During his first term, Trump used Section 301 of the Trade Act of 1974 to impose tariffs on China, citing intellectual property theft. A second term could see a continuation or expansion of these tariffs. However, China would likely retaliate by increasing tariffs on U.S. goods and shifting purchases to other countries, impacting U.S. exporters and agricultural sectors.
Effects on Mexico and USMCA
Trump’s trade policies would also affect Mexico, particularly in the context of the USMCA review in 2026. Trump might push for stricter rules of origin for automotive imports and threaten tariffs to negotiate better terms for the U.S. auto industry. Although permanent tariffs on Mexico are unlikely, temporary threats could weaken investor confidence and create business uncertainty. Since the USMCA was signed in 2018, the U.S.-Mexico trade deficit has increased significantly, potentially prompting Trump to demand changes to the agreement.
Impact on Vietnam
Vietnam has benefited from the U.S.-China trade conflict, attracting manufacturing investments. However, Trump’s second term could see tariffs on Vietnamese goods due to their growing trade surplus with the United States, which reached $104.5 billion in 2023. Tariffs on Vietnam would push more manufacturing to other Southeast Asian and South Asian countries, though they are less likely to face tariffs under another Trump administration.
Relations with the European Union
A second Trump term would likely reignite trade hostilities with the European Union. Issues such as aluminum and steel tariffs, digital services taxes, and potential tariffs on European vehicles could sour trans-Atlantic relations. European countries would likely retaliate with tariffs on U.S. goods, and the ongoing U.S.-EU negotiations over steel and aluminum could halt. Additionally, trade tensions with Europe could push EU leaders to negotiate with China over their trade disputes.
Conclusion
A second Trump term would bring significant changes to global trade, marked by increased tariffs and protectionist policies. These measures aim to reduce the U.S. trade deficit and protect domestic industries but could lead to economic challenges and strained international relations. Countries like China, Mexico, Vietnam, and European Union members would need to navigate these changes and adjust their trade strategies accordingly. The global trade environment would likely become more complex and competitive, requiring careful negotiation and collaboration among nations.
