When Donald Trump re-emerged on the political stage with his campaign pledges to “rebalance” U.S. trade, much of the world interpreted his message as protectionist rhetoric aimed at a domestic audience. Yet behind the slogans lies a sharp reorientation of American trade policy, one that Trump and his advisers believe can serve U.S. geopolitical and economic interests in a shifting global order. To understand its trajectory, it is essential to examine both the ambition of Trump’s trade strategy and the risks it poses for the global economic system.
The Problem Trump Sees
At its core, Trump’s critique of the global trading order pivots on the belief that the United States has been disadvantaged by decades of liberalization. Successive administrations, in his view, allowed allies, strategic competitors, and emerging markets alike to benefit from access to the U.S. consumer market while doing too little to defend American industry. The chronic U.S. trade deficit with countries such as China, Germany, and Mexico has become, in Trump’s narrative, a symbol of weakness and poor leadership.
That narrative frames trade deficits not as benign economic outcomes but as strategic vulnerabilities. By this logic, dependency on imported goods, whether steel, semiconductors, or pharmaceuticals, threatens both U.S. prosperity and national security. Restoring “fairness” in trade becomes synonymous with restoring U.S. power.
Trade Policy as Industrial Policy
For Trump, tariffs are not merely bargaining tools, they are a mechanism for advancing a domestic industrial revival. One of the most significant moves came in March 2018, when his administration imposed sweeping tariffs of 25 percent on imported steel and 10 percent on aluminum. Whereas past administrations embraced tariff reduction and multilateral consensus as ends in themselves, Trump treats tariffs as levers of industrial policy. His willingness to impose tariffs across wide swaths of imports reflects a conviction that high duties will both shield domestic producers and force foreign firms to invest and manufacture in the United States.
The long-term objective is the reshoring of supply chains critical to U.S. competitiveness. Beyond goods, Trump’s advisers have floated using trade barriers and incentives to spur technological independence in areas like artificial intelligence, 5G infrastructure, and clean energy manufacturing. This represents a direct challenge to the globalization model in which cross-border interdependence was valued above national self-sufficiency.
A Confrontational Multilateral Stance
Trump’s goals go beyond bilateral disputes with China or Europe. His trade doctrine presumes that existing institutions, the WTO most notably, are structurally incapable of delivering the kind of outcomes he desires. In December 2019, for instance, the Trump administration blocked reappointments to the WTO appellate body, effectively paralyzing the organization’s dispute settlement function. That approach underscores Trump’s conviction that multilateral frameworks constrain American sovereignty.
Instead, Trump favors unilateral pressure and selective bilateral deals, where he believes U.S. economic weight can secure more favorable terms. For smaller partners reliant on U.S. market access, this asymmetry can yield concessions that multilateral negotiations would dilute. But it also fractures the global consensus around free trade rules, creating a patchwork of ad hoc agreements.
Strategic Competition with China
Perhaps the most ambitious, and most contested, dimension of Trump’s trade agenda is its orientation toward China. While past U.S. administrations pursued engagement in the hope that China would evolve toward a more market-oriented economy, Trump characterizes Beijing’s state-driven capitalism as fundamentally incompatible with a rules-based system. Tariffs on Chinese imports, curbs on investment, and restrictions on technology transfers are not merely economic measures, they are instruments of strategic competition.
A milestone came in January 2020, when Washington and Beijing signed the “Phase One” trade deal. The agreement was designed to secure Chinese commitments on agricultural and energy purchases, intellectual property protections, and currency practices. Yet for Trump, the deal was less a final settlement than a tactical pause in a broader decoupling effort. His ultimate objective is not just to reduce the bilateral deficit but to reconfigure global supply chains away from Chinese dominance. By compelling firms to decouple or “friend-shore” production, his administration hopes to strengthen U.S. alliances and reduce the geopolitical leverage Beijing accrues by supplying the world.
Risks of the Trump Doctrine
Yet this strategy carries substantial risks. First, it assumes U.S. industries can quickly scale up to replace imports, an expectation undercut by labor shortages, higher production costs, and global competitiveness gaps. Tariffs, while politically popular, raise input costs for American manufacturers and consumer prices for households, threatening political backlash and economic inefficiency.
Second, a strategy premised on unilateralism tends to alienate allies. Countries like Germany, Japan, and South Korea, while sympathetic to U.S. concerns about China, bristle at being targeted by tariffs themselves. By treating trade partners more as competitors than as coalition partners, Washington risks undermining the very alliances it needs to contain Beijing’s economic influence.
Finally, dismantling or sidelining multilateral institutions such as the WTO erodes the rules-based system the U.S. itself helped architect. While Trump argues that such institutions tie America’s hands, their collapse risks fostering an environment where economic coercion and retaliatory trade wars become normalized, reducing predictability for U.S. exporters and investors.
Conclusion: A Gamble with Global Consequences
Trump’s trade policy is not a detour from U.S. foreign policy priorities but increasingly central to them. It is both industrial strategy and geopolitical strategy, intended to restore U.S. leverage in a world of great power competition. Whether it succeeds will hinge on whether the United States can revive its industrial base without triggering inflation, maintain alliances even while fracturing global institutions, and contain China without destabilizing global markets.
The gamble is clear, Trump is betting that a more confrontational, unilateral trade policy will secure America’s long-run primacy. But in remaking the logic of globalization, Washington risks reshaping not just its own economic trajectory but the very foundations of the global order.
