"Aggressive Unilateralism" - The New Focus of US Trade Policy

The administration of President Donald Trump has changed the focus of the international trade policy of the United States from fostering trade liberalization through multilateral reciprocity to countering unfair and nefarious trade practices of foreign firms, state owned enterprises and governments. Concerns of countries regarding unfair and nefarious international trade practices has a long trade policy history and actions to deal with it are known in the United States Congress as aggressive unilateralism. This paper argues that in the period between the two world wars the focus of trade policy concerns shifted to trade restrictions imposed by governments. After the Great Depression and the Second World War those putting in place multilateral institutions to deal with trade problems focused exclusively on tariffs and trade barriers imposed by governments and made no provisions for governments to act against what they perceive as unfair and nefarious international trade practices of trading partners. Trade liberalization through multilateral reciprocity became the ruling paradigm of international trade policy and was accepted by most governments and all US administrations from Truman through to Obama – although aggressive unilateralism was manifest in the United States Congress. The Trump administration eschews the ruling paradigm and actively practices its own brand of aggressive unilateralism, although it does not use the term but rather wishes to make it part of the president’s brand. Multilateral trade institutions need to find the means to retain the benefits of liberalization based on multilateral reciprocity while incorporating mechanisms to allow governments to deal with unfair and nefarious international trade practices.