Democrats’ Concrete Action on Trade Outperforms Trump’s Ineffective Bluster

 

Download PDF

Trump’s Dangerous Trade Policies Hurt the American Economy

Donald Trump always said he would negotiate a “better deal” for Americans – but all he has delivered are failed policies that ballooned trade deficits, cost Americans billions of dollars, and lost hundreds of thousands of good-paying American jobs. Worse yet, none of his actions have had any real effect on China’s unfair trade policies, which have been harming American families for decades.

Instead of learning his lesson, Trump is doubling down by promising even more aggressive measures in his second term, including an across-the-board “10 to 20 percent” tax on all imports – a policy that would amount to at least $2,500 and up to $3,900 in new taxes for a typical household. This tax increase will fall hardest on lower and middle income families, and Trump’s plan fails to differentiate between our closest allies and our toughest adversaries. Meanwhile, Trump’s Project 2025 tax plan would deliver $1.3 billion in tax cuts to America’s five largest oil companies.

Trump’s leadership hurt the economy and cost American jobs. 

  • Trump not only failed to achieve his objectives, but also hurt U.S. businesses and consumers along the way. Trump’s policies didn’t create jobs. Instead, the nation was made poorer as prices rose and the American economy became less efficient.

  • A study on U.S.-China trade concluded that Trump’s first term policies cost the U.S. economy 245,000 jobs. During the first full year in which his policies were in effect, American economic growth shrunk by nearly $200 billion, and U.S. real income declined by $1.4 billion per month.

  • Overall manufacturing employment fell for five consecutive quarters under Trump – leaving the pre-pandemic level of manufacturing employment lower than when Trump took office.

Trade deficits, especially with China, grew under Trump. 

  • The Trump Administration never had a real plan for reducing America’s trade deficit. In fact, American deficits with China and the rest of the world were higher in 2020 as a result of Trump’s tariffs than they had been in over a decade. 

  • The overall U.S. trade deficit rose by more than $100 billion in 2019 and reached its highest level since July 2008, during Donald Trump’s final full year in office. U.S. exports to China, the main source of Trump’s frustration, grew only marginally, while Chinese exports to the U.S. grew by a whopping 20 percent, thereby increasing the bilateral trade deficit.

Trump’s tax reforms encouraged offshoring and let some of America’s richest companies pay no U.S. taxes.

  • Trump’s 2017 Tax Cuts and Jobs Act encouraged many U.S. multinational companies, including semiconductor and pharmaceutical companies, to move production out of the United States, particularly to Europe and Asia.  

  • It also encouraged companies to play games to avoid U.S. taxes altogether. Thanks to Trump’s tax cuts, most major U.S. drug companies now pay literally no U.S. taxes, despite U.S. drug prices being among the world’s highest.

Trump failed to hold China accountable.

  • Trump’s policies were not effective in changing China’s actions, policies, or practices. Despite Trump's tough talk, the Chinese outplayed Donald Trump and hurt Americans and the American economy in the process.

  • After two years of escalating tensions, Trump sought a deal to halt the trade war he started, which cost the American economy billions of dollars and hundreds of thousands of jobs. But Trump’s “historical trade deal” failed to live up to its hype – with China buying none of the additional $200 billion of exports that the deal promised.

Trump has allowed manufacturing and investments to go overseas.

  • Trump’s trade policies undermined U.S. national security by allowing China to achieve a dangerous dominance in the production of the advanced semiconductors critical to military technology, communications, health care, clean energy and more. Trump’s failed leadership spurred a massive boom in chip exports to China, selling our most valuable and sensitive technology to our greatest competitor. 

  • Trump also ceded ground to China in the competition for rare earth minerals, which serve at the heart of the world’s most important technologies – especially high-end U.S. defense industries. After four years of inaction under Trump, China is the world's top miner and processor of rare earths. 

  • Trump also failed to stop American venture capitalists and other investors from investing hundreds of millions of dollars into Chinese tech companies that later engaged in mass surveillance and other human rights abuses. Despite his tough rhetoric, Trump oversaw a massive transfer of wealth from the United States and American companies toward Beijing.

Trump Is Doubling Down on Higher Taxes and Escalating Tensions with China. 

  • Trump is proposing “10 to 20 percent” on all imports – 60 percent of which come from our closest allies. Recent analysis found that Trump’s proposed tax would amount to a roughly $3,900 annual tax increase for the typical household, including a $90 tax increase on food, a $90 tax increase on prescription drugs, and a $120 tax increase on oil and petroleum products.This tax increase will fall hardest on lower and middle income families.

  • Trump is also vowing to implement a 60 percent tax on all Chinese imported goods. This tariff would not only raise prices substantially for American consumers but could also jeopardize one million jobs in the United States that are dependent on exports to China.

Published: April 2024

Updated: November 2024