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Analysis Politics

Protectionism is raising its head in the US anyway

23 October 2024 - Jurphaas Lugtenburg

In the US, the campaign teams are working overtime. Trump was frying fries at McDonalds and Harris gave an interview on Fox News. The plans that both candidates stand for are almost snowed under and you would almost forget that it is about the next president of the US. The trade policies that both candidates stand for are nevertheless remarkable.

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With just a few weeks to go until the US presidential election, we can conclude that both candidates are not warm advocates of free trade. Trump is widely known to want to impose a broad import duty on products from China. When news broke that John Deere might want to move production to Mexico, Trump proposed a 200% import duty.

Incidentally, during Trump's previous term as president, the United States-Mexico-Canada Agreement (USMCA), the successor to the NAFTA treaty, was approved. Harris was one of the 2020 senators (out of 10) who voted against that treaty in 100. According to Harris, there is insufficient attention for climate change in the treaty and she recently repeated that criticism. Suzanne Clark, chair of the US Chamber of Commerce, even spoke to Bloomberg about 'two presidential candidates who are anti-trade'.

Deal maker
Meanwhile, the EU is digging in against potential US trade barriers. For example, Trump is threatening to impose tariffs on the European - and specifically the German - car industry if he returns to the White House. Europe wants to avoid a repeat of what happened with steel during Trump's previous term. The playbook for immediate countermeasures is already ready in Brussels, various sources indicate.

Whether it will go that far is another matter. In addition to the USMCA, Trump made deals with South Korea, Japan and China during his presidency. Deep down, Trump is a 'dealmaker' according to various analysts.

China
The American corn and soybean growers' unions, the NCGA and the ASA, are not concerned with a trade war with Europe. They are mainly sounding the alarm about a possible trade war with China. If China throws out the 2020 trade agreement and imposes the old tariffs, American farmers will lose an important sales market. Finding a replacement for that will be impossible, the unions warn. Brazil and Argentina come in third. There is still room to increase production there and they will be more than happy to fill the gap left by the US if it can no longer export to China, argue the NCGA and ASA.

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