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Trade in the Time of Trump: Trade Treaties and Free Trade Agreements

Free Trade Agreements, such as NAFTA, were approved by majority vote of each house because they have been treated as congressional-executive agreements rather than treaties.

The U.S. has 14 free-trade agreements with 20 countries, which account for one third of the nation’s imported goods and one half of all exported goods. The United States’ largest goods and services trading partner is China, with an estimated $161.6 billion in exports and approximately $497.8 billion in imports. Between China and Mexico alone, the two make up over 25% of all U.S. international goods and services trade.

The new Trump administration is proposing that all imports from China will have a 45% tariff, while imports from Mexico will have a 35% tariff. Furthermore, the President has the ability to raise tariffs unilaterally and establish quotas.

Trump’s Other Proposals

Renegotiate North American Free Trade Agreement (“NAFTA”)

– Since NAFTA:

  • US exports to Canada increased 200% to $301B.
  • US exports to Mexico increased 443% to $226B.
  • Imports from Canada increased 199% to $322B.
  • Imports from Mexico increased 602% to $280B.
  • Withdraw Trans-Pacific Trade Partnership (“TPP”)
  • Withdraw Trans-Atlantic Trade and Investment Partnership (“TTIP”)
  • Withdraw from the World Trade Organization (“WTO”) which is the trade framework for 163 countries.

    What Does This Mean?

On a National Level

  • Countries we impose tariffs on would likely reciprocate tariffs on U.S. goods and services.
  • Trade war would spark retaliation by every other foreign economy.
  • High tariffs on U.S. goods could reduce manufacturing and production, which would result in lay-offs and closures.
  • Lay-offs and closures affect hourly wage, low-income workers disproportionately.
  • Withdrawing from agreements gives other countries the opportunities to strengthen their ties.
  • Diminished international leadership role.
  • China would take the lead in setting trade policy in the Asia-Pacific region, which includes the U.S., Canada, and Mexico.

On a Local Level:

  • Imposing an import tariff on China would likely result in retaliation, which could affect the imports of aircrafts. Keep in mind, China is one of Boeing’s biggest spenders.
  •  Losing aircraft sales would not only affect Boeing, but also third-party supply chain and services vendors.
  • Affect fruit and agriculture, including wine exports from Washington.
  • Washington State could be one of the regions affected most by a trade war.


If you have any questions or comments, please contact your KTC attorney.

Dino Vasquez has extensive experience dealing with the U.S. State, Commerce, and Treasury Departments on behalf of exporters.  He helps clients evaluate whether they are subject to these regulations and works with them to bring their operations into compliance.  

Disclaimer: The materials you find in this email have been prepared by Karr Tuttle Campbell to provide information about the services we offer to our clients and to provide information of general interest about a variety of legal subjects. This information is not intended as legal advice or as a substitute for the particularized advice of your own counsel and should not be relied upon as such. The advice appropriate for you will be dependent upon the particular facts and circumstances of your situation. The transmission or receipt of this information does not create an attorney-client relationship.