Despite Trump’s Tariffs, Trade Barriers Remain

This piece is part of a joint analysis assessing the Trump administration’s performance during the first ninety days of “liberation.”

Since his first term in 2017, President Donald Trump’s trade policy has had two dimensions: one familiar, one unfamiliar. The unfamiliar—indeed, radically unfamiliar—approach has been the huge increase in tariffs on imported goods for the first time in nearly a century. U.S. tariffs on imports are now at an average effective rate of nearly 16 percent, the highest since 1936; the effects on consumer prices are just starting to be felt, but are estimated to cost the average household nearly $3,000 annually.

But the more familiar dimension has a long history in U.S. trade policy: Trump’s effort to reduce or remove foreign barriers to U.S. commerce. Correctly or incorrectly, the United States has long perceived itself as a relatively open economy in which its exporters are victimized by foreign trade barriers. Since 1985, the office of the U.S. Trade Representative (USTR) has published an annual list of barriers facing U.S. commerce around the world; the most recent edition ran nearly four hundred pages. An annual report detailing alleged foreign violations of U.S. intellectual property rights, known as Special 301, dates all the way back to 1974.

When Trump announced his plan in February 2025 for “fair and reciprocal trade”—arguing that “the United States is one of the most open economies in the world, yet our trading partners keep their markets closed to our exports”—he was reading from a familiar playbook. One reason markets may have shrugged off Trump’s tariffs so far is investors’ hope that the tariffs are part of a larger bargaining strategy that will eventually lead to fewer barriers to global commerce.

But such confidence is unwarranted. Trump has governed now for four and a half years, and his record shows little success in reducing foreign trade barriers. His first term deal with China left higher tariffs in place on trade in both directions. China fell far short of its commitments to purchase U.S. goods—admittedly a crude metric for tackling foreign trade barriers. U.S. companies exporting to China were left worse off than they would have been without the deal. China also committed to better protecting intellectual property and eliminating pressure on U.S. companies to transfer technology; a May 2024 USTR report found that although China made some positive changes on forced technology transfer and foreign ownership restrictions, the measures were mostly “superficial” and offset by more aggressive cybertheft and espionage. The Biden administration increased tariffs on China further in response to those findings. Still tougher issues, such as distortions caused by Chinese industrial subsidies and state-owned enterprises, were left to a promised Phase Two negotiation that both parties never completed.

Other Trump agreements have shown similarly minimal results. Deals on steel and aluminum in his first term lifted tariffs on Argentina, Brazil, and South Korea in exchange for quotas without addressing unfair subsidies and other distortions in those industries. Similar deals with Japan and Europe were reached under President Joe Biden. Trump’s 2019 deal with Japan removed barriers on digital trade and farm exports, but only served to regain the market access Trump had rejected in walking away from the Trans-Pacific Partnership. The 2019 U.S.-Mexico-Canada Agreement—reached after Trump threatened to tear up the 1995 North American Free Trade Agreement—did open some sectors, such as digital trade, but restricted others, such as autos.

Overall, Trump’s accomplishments in eliminating unfair foreign trade barriers in his first term were modest, and by no measure an improvement over his predecessors. So far, there is little reason to think his much more aggressive tariff threats in his second term will yield better results.

To say that most of modern U.S. trade policy has been aimed at reducing unfair foreign trade barriers is not a stretch. Successive rounds in the General Agreement on Tariffs and Trade focused on the generally higher tariff barriers in other countries. Starting in the 1970s, the negotiations tackled other less obvious barriers to trade—government subsidies, anti-dumping and countervailing duties, intellectual property violations, regulatory restrictions on services trade, and many other non-tariff barriers. Free trade agreements such as those with Canada and Mexico aimed to go much deeper in opening markets. And beginning with the Trade Act of 1974, the United States developed Section 301 and related tools to tackle trade practices deemed unfair through negotiations and the threat of U.S. tariffs.

With all the criticism today of the dispute settlement system established by the World Trade Organization (WTO) from both Republicans and Democrats, it is easy to forget that the United States was once an enthusiastic proponent of binding dispute resolution. Based again on the assumption that other countries had more restrictive trade practices, the United States hoped that binding rules would work to its benefit. Over time, that hope came to seem naive as the WTO’s judges reached decisions that limited the U.S. ability to deploy fairly benign trade restrictions such as safeguards and anti-dumping rules while greenlighting China’s system of massive industrial subsidies.

Trump’s first term marked a clear rejection of the WTO system for its failure to constrain China, a perception shared by Obama administration officials. The Trump administration reverted to pre-WTO tools, imposing tariffs of as high as 30 percent on Chinese imports following a long investigation under the old Section 301 statute. But the tariffs were supposed to be a means rather than an end; the inadequacy of the Phase 1 negotiations and the collapse of the Phase 2 follow-on simply meant new U.S. tariffs remained on many Chinese imports with little change to the unfair trade practices the tariffs were meant to remedy.

Trump’s second term has been far less disciplined. Instead, the president has pursued a scattershot approach to imposing tariffs on both allies and adversaries, perhaps in the hope that such “shock and awe” tactics would force other countries to remove trade barriers that were impermeable to more conventional trade strategies. So far, however, the results have been minimal. Though other deals are likely to be announced before the July 9 deadline for additional U.S. tariffs, there is little sign of any significant rollback of foreign trade restrictions. Deals with China have mostly restored the status quo, but with still higher tariffs. An agreement with the United Kingdom will open some new opportunities for U.S. farm exports, but the country was not high on anyone’s list of unfair traders. Pressure on Canada, which sends 75 percent of its exports to the United States, did force the new Liberal government to back down on its digital services tax, which the United States argues discriminates against large U.S. companies such as Amazon, Google, and Meta.

Markets and trading partners would of course welcome additional deals as signals that trade rules are at least partially reverting to the status quo that existed before Trump’s second-term tariff barrage. But there seems to be little hope that the Trump administration will reduce unfair foreign trade practices in any meaningful way. Instead, by imposing and likely maintaining the highest U.S. tariffs since the 1930s, the United States will have switched sides, firmly entrenching itself as among the worst of the unfair traders.