Trump's Trade Policies Have Done 'Nothing to Support Exports,' Report Says
The Trump administration has “done virtually nothing to support exports,” failing to open new foreign markets for U.S. sellers while also tightening export controls, according to an Aug. 2 report by the Peterson Institute for International Economics. At the same time, U.S. export growth has “dropped sharply,” the report said. “Unless the president reverses course, his trade policy will continue to weaken rather than strengthen the US economy as well as undermine the global trading system,” the report said.
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As Trump has pushed other countries, including China, to buy more U.S. agricultural and industrial goods, U.S. exports have only suffered, the report said. Exports have “become one of the chief victims of the president’s trade conflicts” and their growth has plummeted over the last six months, rising by an annual rate of less than 2.5 percent since September 2018, when they had been climbing by almost 9 percent, the report said.
One of the root causes is Trump’s import tariffs, the report said. Higher tariffs lead to higher costs for exports because exporters depend on imported inputs, the report said. As a result, the U.S. steel and aluminum tariffs hurt U.S. car sales abroad.
Trump’s tariffs also often trigger foreign retaliation that directly impacts exports, the report said, including that from Europe, Canada, Mexico, Turkey and China. In addition, the higher budget deficit has kept U.S. interest rates high, relative to other economic indicators though historically low, which strengthens the exchange rate of the dollar and weakens foreign markets for U.S. goods, the report said.
The uncertainties surrounding the U.S.’s trade policies also hurt exporters by discouraging them “from making the investments needed to improve their competitiveness and expand their markets,” the report said. As U.S. exporters appear less and less reliable to the rest of the world because of the country’s trade wars, their reputation has suffered “incalculable damage,” the report said.