Donald Trump’s second administration —Trump 2.0 — is using tariffs differently than Trump 1.0 from 2016 to 2020.
In Trump 1.0, according to presentations made during an April 2 webinar on the Republican’s first 100 days, tariffs were a means to an end, that being a better trade deal with China.
With Trump 2.0, the tariffs are the means to an end that, ultimately, challenges a world order of cooperation and trade largely established by the 1944 agreements made here in New Hampshire at Bretton Woods.
Mohamad Chatila who has owned and operated Chatila’s Sugar Free Bakery for 38 years, meets with Sen. Jeanne Shaheen at his wholesale production facility in Derry on March 31. Chatila, who exports 85% of his wholesale products to Canada; say many of his contracts have been terminated by Canadian buyers due to recent tariffs imposed by the Trump Administration. (Courtesy photo provided by office of Sen. Jeanne Shaheen)
“This is a world politics issue,” said Alynna Lyon, a professor of political science at the University of New Hampshire. “Other countries are looking at this like: Wait a minute, you’re changing the rules to the game. These are the rules that actually were written in New Hampshire and largely by the United States. So there’s a lot of uncertainty and insecurity about that.”
Lyon was one of five participants in the University of New Hampshire webinar, hosted by Stephen Bird, director of the Carsey School of Public Policy and UNH political science professor. He was joined on the hour-long presentation by Lyon; Rich Ashooh, corporate vice president of global trade and government affairs at Lam Research; Ryan Gibson, an assistant professor in the UNH Department of Sociology; and Jennifer Frezzell, an attorney with a background in public policy and social issues.
The Bretton Woods Agreement of 1944, involving 44 nations post World War II, was designed to create economic stability after World War II and promote international trade.
Tariffs are normally carried out with some kind of study as to what their effects might be — economically, politically. The trade war with China during his first administration reached a level of peace with the signing of the so-called Phase One agreement that addressed trade secrets, patents and pharmaceutical-related intellectual property.
“This time around, the president’s choosing a third way, which is an emergency authorization, which requires no study,” said Ashooh, who worked for the first Trump administration as assistant secretary of commerce for export administration.
“So the unintended consequences of the tariff approach this time around are likely to be more significant because no study has been done,” he said. “There again, what remains to be seen, and it certainly remains to be seen, what kind of tariffs and their extent will be employed.”
Trump has already levied a 25% tariff on imported steel and aluminum, a 25% tariff on goods from Mexico and Canada and a 25% tariff on all imported automobile and automobile parts.
He went further on April 2 — what he has dubbed as Liberation Day — announcing a baseline tariff of 10% on U.S. imports from all countries and what are called “reciprocal tariffs” aimed at penalizing certain countries for their trade barriers. On that score, he plans to impose 34% tariffs on China, 20% on the European Union and 24% on Japan.
“The one thing I’d say about this term ‘liberation’ — that seems to be a reference to what is now becoming the driving motivation, which is called reciprocity,” Ashooh said. “The president is articulating the tariffs are going to be employed mainly to level the playing field with other nations, although, again, whether that is true in substance will remain to be seen.”
According to Lyon, a normal route to challenge unfair trade practices is through the World Trade Organization. “But this is Donald Trump … he wrote a book called ‘The Art of the Deal,’ and he likes to use things like this as leverage, as a mechanism to get leverage and folks to the bargaining table,” she said.
The seriousness of the issue, according to Lyon, can be seen by the unlikely trio of China, South Korea, and Japan announcing a trading alliance. “A year ago, I couldn’t imagine that China, South Korea and Japan were going to be united in terms of their response to U.S. foreign policy and economic policy,” she said.
Gibson drew parallels to history, comparing Trump 2.0 to the first 100 days of the administration of Franklin Delano Roosevelt, who in his first three months as president got Congress to pass major bills to counter the effects of the Great Recession.
“One of the first things FDR did was set up the Reciprocal Tariff Act, which allowed him to negotiate bilateral tariff agreements with other countries. But then it was to bring all the tariffs down one by one. And this time, it’s the exact flip,” he said.
Webinar participants agreed that Trump has been taking campaign politics, driven by voter desire on such issues as the economy and immigration, and turning them into policy.
Gibson cited post-election polling by data scientist David Shor that showed, by a 78% to 18% margin, voters said “delivering change that improves Americans’ lives” was more important than “preserving America’s institutions.”
“I think what many voters were feeling was that the prior economic liberal system wasn’t working for them, whether it’s rents, housing, groceries,” said Gibson, noting that Americans on the whole are pragmatic and are willing to tinker with processes that they feel don’t work.
“I think what America, what the president, is doing is really experimenting with a return to economic nationalism in the 21st century, and what that looks like. And I think the big question for him will be, can you experiment, even if it’s with an old system? Can you experiment with this and deliver change that improves people’s lives?” Gibson said.
“And I think that’s where voters are right now. If you look at the polling, it’s not negative or very positive, it’s sort of middling. And I think that’s because Americans are waiting to see the results of some of these big changes in the experiments, and that includes tariffs,” he added.
Less than half of NH voters in poll support tariffs
The most recent polling from the University of New Hampshire’s Survey Center shows that 48% of Granite Staters approve of how Trump is handling his second term, 52% disapprove, and 1% are unsure.
The polling further shows less than half (41%) of New Hampshire voters strongly (24%) or somewhat strongly (17%) approve of Trump’ raised tariffs, 53% strongly (46%) or somewhat (6%) disapprove, 4% are neutral, and 2% are unsure.
According to the same poll, 68% of Granite Staters believe a recession is very (35%) or somewhat (23%) likely to happen in the U.S. within a year.
U.S. Sen. Jeanne Shaheen, D-NH, has visited New Hampshire businesses that say they’re being directly and adversely impacted by the Trump tariffs.
During a March visit with C&J Bus Lines in Portsmouth, which provides transportation from the Seacoast region to Logan Airport and South Station in Boston, founder Jim Jalbert said his purchase of buses from a Canadian supplier will increase substantially.
In another visit later in the month, the owner of Chatila’s Bakery & Ice Cream told the senator that most of the ingredients for his all-sugar-free pastries come from Canada or China and that much of his equipment and parts for his machines come from Europe.
After Trump’s Liberation Day announcements on expanded tariffs, Shaheen issued a statement saying they “will indeed punish Granite State families, consumers and small businesses the most. Instead of focusing on how to lower costs for families who are struggling to make ends meet, the President is insistent on starting an unnecessary trade war.”
Losing ‘soft power’
The UNH panel touched on other aspects of Trump’s first 100 days, including the loss of the country’s “soft power” and his broad use of executive power and its potential constitutional challenge to the legislative and judicial branches of the U.S. government.
Soft power is a term applied to a country’s influence without the use of military force. For the U.S., according to the panel, that came from the work of U.S. Agency for International Development (USAID) and Voice of America, both of which have been gutted by the Trump administration.
Without it, said Lyon, the U.S. has ceded its influence in certain countries, opening the door to other soft power influencers such as China.
“It opens up space for the Chinese. I actually think in some ways it might be, in my perspective, kind of an unforced error on the part of the United States, but we’ll see,” Lyon said. Noting that the budgets of USAID and VOA were so small in comparison to other programs, she asked: “What is the game by studying by shutting down these soft power mechanisms?”
Much of what Trump has done through executive orders is being challenged in the courts. Some 160 legal challenges have been filed thus far.
Frizzell noted that the Constitution provides for three branches of government — executive, legislative and judicial —acting as a check and balance of each other.
“I think that what we see right now is a leader of the executive branch who sees that as a more omnipotent branch,” she said. “Many believe the legislative or the congressional branch is not acting in the fullness of their delegated authority, and the judicial branch increasingly is perceived as political in the minds of individuals in this country.”
It remains to be seen whether Trump complies or defies whatever rulings might come from the U.S. Supreme Court as legal challenges play out.
Gibson said he doesn’t believe the Trump Administration will outright defy a Supreme Court ruling.
“I imagine what they’ll first try to do, before pushing and breaking the courts, is find every possible way to work within law and make it work,” he said.
