Trump vs. Harris: A Clash of Visions on Trade Policy
Both candidates want to promote U.S. jobs and investment at home, but they disagree on how to do so: tariffs versus economic subsidization.
In 2018, then-President Trump imposed duties on a wide range of products from China, and on aluminum and steel products from U.S. trading partners in Europe and Asia. In total, his administration placed $80 billion in tariffs on products worth $380 billion. The Biden administration maintained these tariffs and then, in May 2024, added another $18 billion in tariffs on Chinese goods, impacting semiconductors and electric vehicles.
Some exemptions were made for imports from certain allies. Still, estimates suggest that these tariffs will reduce long-run gross domestic product (GDP) by 0.2 percent, will reduce the United States’ capital stock by 0.1 percent, and will result in the loss of 142,000 full-time jobs.
With the 2024 Election Day less than a week away, the question of what lies ahead is top of mind for many Americans. The 2024 presidential candidates—Kamala Harris and Donald Trump—have outlined visions for U.S. trade policies that contrast in many ways, particularly regarding trade with China.
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A Continuing Focus on China, but Different Approaches
China, the world’s second-largest economy, has been a key U.S. and global trading partner since joining the World Trade Organization (WTO) in 2001. Over the past decade, U.S. trade concerns have evolved into a focus on strategic competition with China, seen as the United States’ biggest geopolitical and economic rival.
The U.S. government has addressed trade and investment issues with China—like unfair pricing, subsidies, economic coercion, and intellectual property theft—to maintain economic leadership and promote fair competition. This strategic focus enjoys bi-partisan support and is unlikely to change in the foreseeable future, regardless of who occupies the White House and who controls Congress. Nevertheless, this year’s presidential candidates have proposed different approaches to China trade.
Vice President Harris has identified “tension” in the U.S.–China relationship as stemming from competition between the two nations, but she has also emphasized that “we are not seeking conflict” and referred to the U.S. economic relationship with China as “not about decoupling, [but] about de-risking.” This approach to the U.S.–China economic relationship has been reaffirmed by key U.S. government officials, including Commerce Secretary Gina Raimondo and Treasury Secretary Janet Yellen.
Harris intends to position the United States as “a leader in terms of the rules of the road” and to ensure that China adheres to these standards, an approach similar to that taken by the Biden administration through its use of unfair-trade enforcement initiatives, such as banning imports linked to forced labor, countervailing unfair government subsidies, investigating evasion of duties, and imposing “green” trade import requirements.
Although both candidates are expected to maintain the current tariffs on Chinese products, they differ on the extent to which they would impose additional tariffs or increase existing import duties. In addition, unlike Trump, Harris is expected to encourage U.S. allies to adopt similar policies, with a goal of increasing pressure on China and preventing trade diversion.
Former President Trump has been a strong critic of China, having introduced a more confrontational approach to trade policy toward China in his first term. In this election cycle, he has threatened to impose 60 percent tariffs on Chinese goods and proposed revoking China’s Most Favored Nation status, phasing out essential imports from China, and banning that nation’s purchase of U.S. farmland. As a self-proclaimed “dealmaker,” Trump aims to use these types of measures to gain concessions from China, though the initial attempts to do this during his first term had limited success and provoked retaliation.
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Trade Beyond China
If Trump wins the presidency again, other U.S. trading partners may face new tariff threats as well—not just China. Trump’s current rhetoric is mercantilist in orientation, even more than during his first term. He is suggesting a 10 percent to 20 percent tariff on all imports. He could use various legal authorities to enact such a policy, including sections 232 and 301 of the International Emergency Economic Powers Act and sections 122 and 338 of the Tariff Act of 1930.
Additionally, Trump has threatened tariffs on companies that move production outside the United States. The overall goal of the tariff policy is to force businesses to relocate from overseas back to the United States, which would further erode the post-war trading system. Some Republican members of Congress have already voiced objections to such an approach and are moving to control presidential tariff authorities through legislation.
Harris has firmly criticized Trump’s tariff plan, arguing it would act as a $3,900 sales tax on Americans and cause price hikes and inflation. Rather than adopt a broad-brush tariff policy, she aims to calibrate the U.S. response to unfair foreign trade practices, which would promote more commercial predictability and stability in the marketplace.
Harris’ broader economic policies suggest a focus on strengthening domestic production and reducing reliance on imports through various economic subsidies rather than tariffs. However, her spending could also introduce inflationary pressures and lead to higher U.S. deficits. Harris would continue to use trade laws to combat violations of international worker rights as well as to enforce environmental standards.
At the end of the day, it seems that the candidates’ perspective on economic policy will be:
- Harris focused on domestic industrial policy and diplomacy through unity with U.S. economic partners, and
- Trump pursuing a protectionist and mercantilist policy, which he has promoted as reminiscent of U.S. tariff policies of the 19th and early 20th centuries.
Although the candidates’ approaches differ, the broader consensus on U.S. trade policy—moving away from free trade—is unlikely to change drastically. Both parties continue to present a mostly united front against China, and significant reforms to the WTO remain unlikely. Moreover, trade negotiating authority has long since expired, and the United States has largely abandoned the push for free trade agreements.
Trump renegotiated the North American Free Trade Agreement (NAFTA) and initiated trade negotiations with the UK, Kenya, and Japan, but it is not clear whether he would revisit these initiatives if re-elected. Trump was also a proponent of strong digital trade rules to promote high-tech industries in the United States. His position on U.S. technology is certainly at odds with the present U.S. export control and sanctions environment that has severely restricted U.S. business in China concerning the technologies of tomorrow.
Overall, the negotiating agenda of Trump’s previous term was more ambitious than that of the Biden administration, which has shown little to no interest in pursuing free trade agreements. Trump’s preference for bilateral deals might mean a revival of such negotiations, albeit selectively, if he were re-elected.
Meanwhile, the direction of certain Biden administration initiatives, such as the Indo-Pacific Economic Framework (IPEF) and green steel alliance, remains in question. If Trump wins, the future of these initiatives is in doubt, given his prior administration’s skepticism toward multilateral agreements and environmental regulations. Harris, on the other hand, would likely continue supporting, and possibly expand, these initiatives, aligning them with her broader economic and environmental agendas.
As the 2024 election nears, the contrasting visions of Kamala Harris and Donald Trump on trade policy reflect broader debates about the future direction of U.S. trade and economic strategy. Harris and Trump both want to promote U.S. jobs and investment at home, but they disagree on the means to do so: tariffs versus economic subsidization. Trump may be more open to cutting trade deals, while Harris is likely to continue the Biden administration’s initiatives such as IPEF.
Whichever path U.S. voters choose, their decision will have profound implications for the U.S. economy, the nation’s international relationships, and the global trading system. Companies should stay alert to changes in U.S. trade policies and remain engaged and vigilant in order to adapt.
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