Trump Is On a Win Streak in His Trade War. Will It Last?

President Donald Trump placed tariffs on dozens of countries on April 2. (Alex Wong/Getty Images)

About the author: Wendy Cutler is senior vice president at the Asia Society Policy Institute.

The Trump administration has fallen way short of delivering the “90 deals in 90 days” that the president’s trade advisor, Peter Navarro, promised to deliver after the “Liberation Day” tariff announcement in April. But success shouldn’t be judged solely by the number of deals that have been reached.

If you examine the substance of the dozen or so deals the Trump administration has made, it is hard not to conclude that it is winning its global trade war—at least in the near term. It has secured commitments on market access, increased purchases of U.S. goods, and stepped up foreign direct investment in the U.S, while giving little in return.

The administration benefited greatly from the quick decision of most trading partners to play ball—with the exception of China and, albeit briefly, Canada. Countries watched their neighbors and competitors negotiate deals with the U.S. and rushed to the deal table to prevent being put at a comparative disadvantage.

Once Japan secured a 15% automotive tariff from the U.S. in September, pressure mounted on Korea to achieve the same. It secured similarly lowered auto tariffs in November. After the administration lowered reciprocal tariffs on Vietnam from 46% to 20% in July, other trade partners in the region worked hard to secure equal, if not better, terms.

The administration was therefore able to avoid a collective response from disgruntled trading partners. White, there were preliminary discussions reportedly led by Brussels and Kuala Lumpur about coordinated international responses, these overtures fizzled out. Instead, America’s trading partners are following an “every man for himself” approach.

That has complemented President Donald Trump’s strong preference for bilateral negotiations. It also enabled his administration to wield extensive leverage. As a result, the U.S. got most of what it wanted while conceding little to partners—with the notable exception of China.

Trump’s trade deals may not survive the test of time, however. Their most immediate challenge is the impending Supreme Court decision on the use of the IEEPA statute as the legal basis for reciprocal tariffs. If the court rules against the administration, the validity of existing trade deals would be called into question. Some trade partners may request renegotiations.

They might already be having second thoughts about the utility of their deals, now that the administration is rolling out additional tariffs as part of its Section 232 and 301 investigations. The European Union, for instance, is accusing the U.S. of acting in bad faith by considering additional duties on steel and aluminum products.

Some governments are under domestic pressure for giving away too much to Washington. Malaysia is a case in point. Its citizens have accused the government of handing over its sovereignty to the U.S. Lacking concrete concessions from the U.S., government leaders have had to argue the deal they scored could have been worse. Korea, for example, has touted that it avoided the administration’s demands that it further open its beef and rice markets.

The vague nature of many of the commitments, coupled with the lack of written agreements in some cases, has opened the door for issues in implementation. One needs to look no further than the recent truce with China, in which Trump claimed China agreed to suspend its critical mineral export restrictions for a year. The two sides haven’t even ironed out concrete terms or details on which Chinese regulations to be suspended. Differences of views on what was actually agreed upon and under what time frame could present challenges and raise tensions—particularly if the administration decides to raise tariffs as punishment for noncompliance.

Regardless of the trade deals’ sticking power, the administration’s negotiating tactics have been a wake up call for much of the world. They have accelerated efforts in Ottawa, Brussels, Delhi, and Seoul, among others, to forge trade and economic agreements without the U.S. In doing so, the world has shown it is determined to reduce dependence on the U.S. in the long term.

In the shorter-term, it is easy to declare a U.S. victory in Trump’s trade war. Given the external pressures on his deals—and on the country’s global standing more broadly—that may not hold true forever.

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