Trump's Trade Moves Suggest He Won't Be Keeping All His Promises

March 31st 2017

Thor Benson

President Donald Trump had a lot of bad things to say about trade on the campaign trail, and his hatred of the North American Free Trade Agreement (NAFTA) was a signature issue, but it now seems he's no longer interested in tearing the deal apart. Instead, Trump is seeking minor changes to NAFTA, according to The New York Times, and is issuing executive orders that signal a desire to do more on trade but that could amount to little in terms of real action.

Trump has called NAFTA "the worst trade deal maybe ever signed anywhere" and repeatedly promised to make major changes to it. He also called President Barack Obama's proposed Trans-Pacific Partnership (TPP) trade deal “a continuing rape of our country.” While Trump kept his promise to pull out of the TPP, he now appears to only want minor changes to NAFTA.

Trump's Trade Plans

Trump sent a letter to Congress on Friday that outlines how he would like to see NAFTA renegotiated. It focuses on reinstating certain tariffs, having the federal government buy more U.S.-made products, and reducing "licensing and permit barriers" for companies, according to The Washington Post. "Gone were the threats about pulling out altogether or requiring massive rewrites," the paper noted.

Trump will also sign two executive orders on Friday: One ordering a 90-day study of abusive trade practices that ostensibly hurt the U.S. economically, and another increasing "the collection of duties from countries whose companies American officials believe are selling products in the United States below their cost of production," The New York Times reports.

cargo ship

As the Associated Press notes, the executive orders come one week before Trump is to meet with Chinese President Xi Jinping. As of 2016, the U.S. trade deficit with China was $347 billion — a deficit Trump has pledged to work on eliminating.

What's Really Going On

Richard Wolff, professor of economics emeritus at the University of Massachusetts, Amherst, told ATTN: he's not surprised Trump is changing his tune about NAFTA.

"It's becoming a pattern," Wolff said. "He can't exclude the Muslims the way he thought he could; he can't get the health care the way he thought he could; he can't really get the tariffs on foreign trade the way he thought he could. A lot of the hand waving and gesturing and grandiose bluster always was just that." 

Wolff said trade is both economically and politically very complicated, and you can't make massive changes overnight.


"Over the last 40 years," Woff explained, "huge investments have been made by... big American multinational corporations whose whole rationale was to produce abroad and bring that stuff back into the United States — to have it produced where the wages were lower, where the environmental rules were laxer or easier to evade, where taxes were lower or artificially low, precisely to bring those American corporations in." With all that money invested by corporations, and all of those countries relying on U..S. investment, any big changes would rock the global economic system, he argued.

As for Trump's executive orders, Wolff said it's the same kind of gesturing that he's seen from other presidents. "It's showmanship," he said. "It's very old. It's fairly frequent with new administrations, not only in the United States but elsewhere." He said all the promises to tighten up trade and punish the "bad guys" are probably empty.

President Obama also made multiple promises to turn the U.S. into a leader in exports; those promises were largely not kept.