Remaking of the America’s Trading World
President Trump is reshaping global trade in his own style. For 75 years, America led the global economy, serving as both the production hub and the primary consumer, buying the best and cheapest goods from around the world. This open-market approach allowed other nations to sell freely to the U.S. It was Europe and Japan who took full advantage immediately after WW2, supplying goods while America exported grain, airplanes, computers and arms. Trade deficits for post war era were minor and largely ignored.
Globalization in eighties & nineties then shifted American manufacturing overseas, first moving smoke stack industries and later consumer goods production—primarily to China. Initially, this seemed beneficial, but China, leveraging government subsidies like free land, water, and electricity, attracted not just low-end production but high-tech industries as well. This led to a massive outflow of American manufacturing to China.
As the U.S. imported more from China while exporting little in return, trade deficits soared. Similar imbalances emerged with Canada, Mexico, and Europe. By 2023, America’s trade deficit had reached $920 billion—a figure sustained only through borrowing.
Trump’s effort to restructure trade is aimed at correcting these imbalances. While other nations can continue selling to the U.S., they must also buy American goods rather than imposing tariff barriers. China is the biggest offender, with a $400 billion trade deficit in 2023, followed by Europe, Mexico, Canada, each exceeding $100 billion. Smaller deficits with other nations are easily manageable.
Trump’s trade policies with threat of tariffs are a response to these long-standing issues, and his push to remake global trade has strong justification.
thanks to daddy's love for his prodigal son
