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Why do Trump’s announced trade policies keep coming up empty?

Why do Trump’s big trade announcements go nowhere and why do we keep falling for them?

If there is one fundamental rule for making sense of trade policy over Trump’s first 16 months in office: Do not overreact to new announcements. With the benefit of hindsight, we can observe a growing list of at-the-time seemingly newsworthy policy announcements that ultimately went nowhere.

  • For instance, back in January 2017, Trump suggested that he would pay for a border wall by imposing tariffs on Mexico. That never happened.
  • In an April 2017 interview, Trump suggested he was interested in a “reciprocal tax” on imports, meaning the U.S. should tax imports from other countries at the same rates as those applied to American exports.
  • In February of this year, he resurrected the idea, declaring that the United States would “soon” announce a reciprocal tax, with more information forthcoming “as soon as this week.” Meanwhile, we’re still waiting.
  • In late January, U.S. Trade Representative Robert Lighthizer suggested that “before long” the Administration would select an African country to begin new free trade agreement talks. The pro-trade U.S. Chamber of Commerce enthusiastically nodded its head. So far nothing seems to have happened.

Why do these dramatic policy announcements keep falling flat? There are several possible explanations, not mutually exclusive.

  • Perhaps the "deep state" in the form of career officials working at the Office of the U.S. Trade Representative and the Commerce Department, are conspiring to thwart the Trump administration plans. Less sinisterly, this may simply be more evidence that achieving policy change is difficult.
  • Another explanation comes from the international level: In its policy implementation strategy the administration has failed to recognize that other countries have agency too, and are able to shape the ultimate outcomes of American trade policy.

Whatever the reason, though, trade policy analysts and journalists need to catch up to this reality, and start dramatically discounting the importance of Trump trade policy announcements, on both the protectionism and the liberalization fronts.

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