Trade Wars and Steel Tariffs: Harming Allies While Failing to Rebuild Manufacturing
Trump's Section 232 and Section 301 tariffs disrupted U.S. trade relationships with allies and adversaries alike. The steel and aluminum tariffs targeted Canada, the EU, Japan, and South Korea — treaty allies — under a national security designation that even many Republicans criticized as pretextual. Retaliatory tariffs by China on soybeans, pork, and other agricultural goods caused severe damage to American farmers, requiring $28 billion in emergency agricultural assistance.
Record summary
Grade
Grade 2 of 5: Major Abuse of Power
Executive actions that exceed constitutional authority, circumvent statutory constraints, or weaponize government institutions for political ends. Scale and definitions
- Status
- Concluded
- Incident date
- Record updated
- Location
- Washington, D.C. / United States
- Category
- Corruption & Self-Dealing
- Legal posture
- Reported
- War-crime classification
- Enabling conduct
- Verification
- Independently verified
- ICC relevance
- No
- Sources
- 4 cited
- Stable ID
trump-steel-tariffs-trade-war- Victims
- American farmers who lost export markets; workers in downstream manufacturing industries that use steel and aluminum; consumers who paid higher prices; foreign industries and workers subjected to retaliatory policies
- Alleged responsible parties
- Donald Trump, President of the United States— White House
- Peter Navarro, Director, National Trade Council; architect of China trade war strategy— White House
- Robert Lighthizer, U.S. Trade Representative— Office of the United States Trade Representative
Key points
- Trump imposed 25% tariffs on steel and 10% on aluminum imports in March 2018 using Section 232 national security authority — applied to Canada, the EU, Japan, South Korea, and Mexico, among others, all of which are treaty allies
- Canada, the EU, and Mexico retaliated with targeted tariffs on politically sensitive American goods: soybeans, pork, bourbon, motorcycles, orange juice — designed to hit Republican-leaning states and constituencies
- The trade war with China, escalated through 2018-2019, placed tariffs on hundreds of billions of dollars in goods; the Peterson Institute for International Economics estimated the cumulative cost to the U.S. economy at $316 billion
- American farmers lost approximately $26 billion in agricultural exports to China in 2018-2019; the administration provided $28 billion in emergency bailout payments — more than the 2009 automobile industry bailout — funded by tariff revenue from consumers
- A WTO dispute panel ruled in 2022 that U.S. Section 232 tariffs on the EU, Canada, and others violated international trade obligations; the U.S. contested the ruling
- The tariffs did not achieve their stated goal of rebuilding American steel manufacturing capacity; employment in steel production increased modestly before declining again; costs to downstream steel-consuming industries exceeded benefits to producers by approximately 3-to-1
Overview
Trump's trade war was presented as a strategy to rebuild American manufacturing and restore trade fairness. Its results were measurably different: it cost American consumers and downstream businesses hundreds of billions of dollars, devastated American agricultural exports, required a taxpayer bailout of American farmers larger than the automobile industry rescue, and ended with a Phase One deal that China promptly failed to fulfill.
The structural trade issues — intellectual property theft, state subsidies, forced technology transfer — remained unresolved.
Tariffs on Allies
The steel and aluminum tariffs were notable for their targets. Canada, the European Union, Japan, South Korea, Mexico — all NATO or treaty allies — were subjected to tariffs under a national security justification that required treating them as threats to American defense. Canadian steel going into American military equipment was declared a national security risk.
The backlash was proportional. Canada imposed targeted tariffs on bourbon, orange juice, and lawnmowers — chosen to hit politically sensitive states. The EU targeted Harley-Davidson motorcycles and agricultural goods from states Trump had won. The retaliation was sophisticated and designed to create political pressure in Republican districts.
The Farmers
The most severe economic casualties of the trade war were American farmers, particularly soybean producers. China had been the largest export market for American soybeans; its retaliatory tariffs effectively shut that market down. Soybean exports to China fell from $12.4 billion in 2017 to $3.1 billion in 2018 — a drop of $9 billion in a single sector.
The administration's response was $28 billion in emergency payments — the Market Facilitation Program — funded by tariff revenue from American consumers. The arrangement transferred money from American consumers and importers, through the Treasury, to American farmers, to partially offset the damage Trump's own policy had caused.
International law engaged
| Instrument | Provision | What it protects or prohibits |
|---|---|---|
| WTO Agreement | GATT Article XXI | National security exceptions to trade rules are narrow; applying national security tariffs to NATO allies was found by WTO panels to be inconsistent with U.S. obligations |
Update log
-
Updated with Phase One trade deal signing.
Sequence of events
-
Steel and aluminum tariffs signed
Trump signs proclamations imposing 25% tariffs on steel and 10% on aluminum imports under Section 232 national security authority. Initial exemptions for Canada, Mexico, and the EU are later removed. Most affected countries announce retaliatory measures.
-
First round of China Section 301 tariffs
The U.S. imposes 25% tariffs on $34 billion in Chinese goods; China immediately retaliates with 25% tariffs on $34 billion in American goods, targeting soybeans, pork, and other agricultural exports from Trump-voting states.
-
Second round of China tariffs
Additional 25% tariffs on $16 billion in Chinese goods; China retaliates in kind. American soybean exports to China collapse from $12.4 billion in 2017 to $3.1 billion in 2018.
-
Tariffs raised to 25% on $200B in Chinese goods
After trade negotiations collapse, Trump raises tariffs to 25% on $200 billion in Chinese goods and threatens tariffs on all remaining Chinese imports. Markets fall. Farmers report severe financial stress.
-
$28 billion agricultural bailout — larger than auto bailout
The Trump administration announces a second round of farm bailout payments, bringing total emergency agricultural assistance to $28 billion — larger than the 2009 automobile industry bailout and funded primarily by tariff revenue paid by American consumers and importers.
-
Phase One China trade deal signed
The U.S. and China sign a 'Phase One' trade deal in which China commits to increase purchases of American goods. Critics note the deal does not address the structural issues (intellectual property theft, state subsidies, forced technology transfer) that were cited as justifications for the trade war; China ultimately does not meet its purchase commitments.
Sources
- Trump Signs Tariffs on Steel and Aluminum — The New York Times
- US-China Trade War Tariffs: An Up-to-Date Chart — Peterson Institute for International Economics
- Trump's China Tariffs Cost Consumers and Companies $315 Billion — The Wall Street Journal
- Trump Bails Out Farmers Hurt by His Own Trade War With $28 Billion — The New York Times