Trump and Trade 2.0: How the 2025 Landscape Differs from the World He Inherited in 2017

As President-elect Donald Trump prepares for another term, he faces a different landscape in U.S. trade than he did back in 2017. The changes stem largely from the decisions made during his first term.

First off, NAFTA has been replaced by the USMCA, marking a significant shift in trade relations with Canada and Mexico.

In 2017, the World Trade Organization (WTO) was struggling to maintain its effectiveness due to a lack of judges on its appellate panel. This issue remains, as neither Trump nor President Biden has replaced those judges. Consequently, the WTO’s influence has diminished, affecting global trade dynamics.

When Trump first took office, labor unions were still closely aligned with the Democratic Party, with Barack Obama finishing his presidency. However, now the Republican Party has shifted its stance. Trump is currently supporting the International Longshoremen’s Association (ILA) in their efforts against technological changes that enhance workplace efficiency. The ILA members are set to vote soon on whether to accept a new contract.

Trump famously called himself the “Tariff King” during his first term. Today, however, it’s President Biden who holds that title, due to the tariffs introduced during his time in office. Even if Trump’s suggested tariffs on Canada, Mexico, and China don’t materialize, he could still claim bragging rights given that U.S. trade has increased from $3.64 trillion in 2016 to over $4 trillion in recent years.

Let’s look at the data. Mexico has become the U.S.’s top trading partner for the second consecutive year, surpassing China, which previously held that position for several years. China is now third, with its share of U.S. imports dropping significantly—from over 21% in 2016 to approximately 13.5% in 2024.

The trade deficit with China was over $550 billion in 2017, a staggering figure that has since decreased to around $300 billion in 2024. Meanwhile, the deficit with Mexico has grown to about $170 billion. The U.S. now faces growing deficits with countries like Vietnam and Canada as well, with Vietnam’s deficit reaching around $120 billion.

The overall U.S. trade deficit has continued to rise, projected to exceed $1 trillion for the fourth consecutive year, up from $735 billion in 2016. As Trump takes office again, he will encounter both familiar challenges and new dynamics in international trade.

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