After tariffs, global trade moves on without U.S.

It’s been just about a year since the Trump administration announced a long list of tariffs on products from nearly every country.

Since then, other countries around the world have been turning to each other to adapt.

“It really has been a crazy year,” said Ted Murphy, partner at law firm Sidley Austin.

While the U.S. has been putting up its own tariff walls, other countries have been tearing theirs down.

“And we see it almost every day now, where new negotiations or new agreements are being reached without the United States,” Murphy said.

Malaysia signed a trade agreement with the UAE. The U.K. signed one with almost the entire Pacific Rim. Europe has been on a free trade rampage.

“(Europe is) finalizing its deal with the Latin American bloc, MERCOSUR, then inking a deal with India, and just this week signing another agreement with Australia,” said Scott Lincicome, vice president of general economics and trade at the Cato Institute.

The U.S. has signed deals too, but those are very different. For starters, they’re not very detailed.

“Ambiguities mean uncertainty,” Lincicome said. “A vague deal with just a few broad terms… really hides tons of devils in the lack of details.”

For example, European Union countries have to pay a 15% tariff on the vast majority of exports to the U.S. — but the deal’s application to pharmaceuticals is unclear.

Businesses don’t like that. And the U.S. tariffs aren’t approved by Congress, so they can change at any time.

“The U.S. deals are not in any way binding,” said Jennifer Hillman, a professor at the Georgetown University Law Center.

So, other countries’ trade agreements have brought their companies certainty, while the U.S. agreements have brought U.S. companies the opposite. But the big difference is that the U.S. deals raised its tariffs, while every other country’s deals lowered theirs.

The U.S. trade deals scaled back the sky-high tariffs announced in April, but the final result brought tariff rates that were still significantly higher than before President Trump began his second term.

Hillman said that means U.S. manufacturers are paying more for their parts, and everybody else is paying less.

“If you look, for example, at what’s happening in the steel industry, the price now of a ton of hot-rolled sheet steel in the United States is over $1,000,” Hillman said. “The price in the rest of the world is around $400 a ton.”

Anybody making stuff out of steel in the U.S. is at a global disadvantage. Still, she said the U.S. has extracted a lot of concessions from other countries.

“Provisions that we’ve been fighting for for years, in terms of getting countries to lower a number of their non-tariff barriers,” Hillman said.

Like, for example, Vietnam easing regulations on U.S. cars. U.S. companies are paying a price for those wins — by literally paying tariffs, and by having to live with a lot more uncertainty.