William_T._Bianco,_David_T._Canon]_American_Polit

The tools of foreign policy 639

States has granted many other countries most-favored-nation status: tariffs on

imports to the United States from these nations are set at the lowest rate placed on any

other nation.

Donald Trump has overturned many of these policies, claiming that many of these

trade deals did not serve U.S. interests. Over the last two years, he has sought to renegotiate

trade agreements and has used existing laws to impose punitive tariffs on various

countries, including China and members of the European Union, arguing that these

countries use regulations and other mechanisms to prevent American companies from

selling products to their corporations and citizens. These nations have responded with

additional tariffs on American exports. These actions may well lead to reduced economic

growth in America and throughout the world, although their effects are not yet clear.

While some Republican and Democratic elected officials have protested Trump’s actions,

there have been no organized attempts in Congress to reverse them.

What is the argument for reversing the move toward free trade? Trade deals are

inherently controversial because they almost always involve winners and losers. Even

if a deal increases overall economic growth in the United States, some people will

be made worse off. For example, if a deal makes it possible for an entrepreneur in a

developing nation to sell a product in the United States at a lower price than domestic

suppliers of the same product are charging, Americans who buy the imported goods

are better off (they pay less for the same product). However, the people who work for

the U.S. suppliers are in trouble (their employers may go out of business if they cannot

find another market for their products). One reason for Donald Trump’s victory in 2016

was high support from rural communities (particularly in the Midwest Rust Belt) that

have lost manufacturing jobs because companies responded to lower tariffs by moving

factories overseas and because companies face competition from foreign suppliers.

Trade is an important part of foreign policy. The United States has used free-trade

agreements and tariffs to bargain with countries for concessions in noneconomic

policy areas or to cement international alliances. For example, one of the incentives

Trump offered to North Korea as part of a denuclearization deal was to reduce economic

sanctions on the country, allowing increased trade and investment. Similarly, one of the

reasons why America has played a central role in crafting trade agreements with Asian

nations was that the government wanted to strengthen America’s political and economic

most-favored-nation status

A standing awarded to countries

with which a nation has good trade

relations, providing the lowest

possible tariff rate. WTO members

must give one another this preferred

status.

Diplomacy often involves protracted

negotiations and many participants.

The Singapore Summit between

North Korea and the United States,

which yielded a promise for peaceful

relations and denuclearization of the

Korean Peninsula, required months of

preparation and the cooperation of the

Singapore government.

Full_18_APT_64431_ch17_614-654.indd 639 16/11/18 11:22 AM