Whether you love him or hate him, President Trump has stuck to his guns when it comes to trade. Throughout the 2016 campaign, he said he was going to crack down on what he deemed unfair trade policies—specifically citing China and Mexico as the main culprits.
The result was a turbulent 2018 that saw plenty of change and uncertainty when it comes to the U.S. and trade relations. And its industry-wide impact makes it the No. 1 story of 2018 according to the Rubber & Plastics News editorial staff.1. Trump declares trade war
It started with steep tariffs against most imported steel and aluminum on March 8—establishing a 25 percent tariff on steel and a 10 percent tariff on aluminum imported to the U.S.—and continued with tariffs on an estimated $50 billion worth of Chinese imports, including 10 categories of tires, rubber, rubber products and rubber processing machinery.
Mexico and Canada were exempt from the initial tariffs, but the countries only avoided them for a few months. In June, President Trump slapped the same respective rates on steel and aluminum imported from Mexico, Canada and the European Union.
He didn't stop there, weeks later levying 25 percent tariffs on $50 billion more in goods imported from China, including retreaded aircraft tires, several types of machinery for molding or processing rubber and plastics, and several motor vehicles.The tariffs didn't stop China from engaging in unfair intellectual property transfers, according to the Office of the U.S. Trade Representative. In fact, the USTR said the tariffs emboldened China to take further steps to harm U.S. workers and businesses.
President Trump responded again in October with another round of tariffs on $200 billion worth of products imported from China, prompting China to hit the U.S. with tariffs on an estimated $60 billion worth of U.S. exports. Most business sectors in the U.S. reacted negatively to the news.
While the U.S./China trade situation remains unresolved, and how trade relations with the United Kingdom will continue after it completes its exit from the EU remains unclear, the Trump Administration did reach a new free trade pact with Mexico and Canada. The U.S.-Mexico-Canada Agreement (USMCA) is designed to replace the North American Free Trade Agreement and would change rule of origin requirements for automotive production, forcing suppliers and original equipment manufacturers to re-align their supply chains.
One caveat: USMCA still needs to go through a long approval process by each respective nation. Stay tuned in 2019 to see if that happens.
