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How Trump's Trade Agenda Played Out In 2019

AILSA CHANG, HOST:

This was the year that President Trump's trade strategy began showing results - a revised NAFTA sailed through the U.S. House; the administration got a trade deal with China. But as NPR's Jim Zarroli reports, some of the thorniest trade problems remain unsolved.

JIM ZARROLI, BYLINE: President Trump came to office threatening to upend America's relations with its trading partners. He threatened to tear up trade agreements like NAFTA. For a while, pro-trade globalists, such as White House economic adviser Gary Cohn, were able to restrain Trump's impulses. But Chad Bown of the Peterson Institute on International Economics says that's no longer the case.

CHAD BOWN: Many of the globalists have left the administration. And so it very much is more of the protectionists and more of the anti-trade folks that are in charge.

ZARROLI: This year, the administration stepped up its rhetoric on trade. Trump formally accused China of manipulating its currency to gain an export advantage. But tariffs remained his go-to weapon against the world. He threatened to slap new tariffs on countries such as France, Brazil, even Guatemala. In May, he dangled a threat of massive tariffs against Mexico if it didn't stop illegal immigrants from crossing the U.S. border.

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PRESIDENT DONALD TRUMP: We are going to see if we can do something, but I think it's more likely that the tariffs go on.

ZARROLI: Trump soon dropped the threat. But other tariffs did go through this year. Americans now pay more for cheese from Italy and wine from France, as well as shoes and diapers and a lot of other things from China. The on-again, off-again nature of the tariffs created chaos and uncertainty for businesses, especially when it came to China. There were months of talks between the two countries. Sometimes Trump said they were going well. Sometimes they broke down unexpectedly, as they did in May.

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TRUMP: We were getting very close to a deal. Then, they started to renegotiate the deal. We can't have that.

ZARROLI: This fall, China and the U.S. announced what Trump called a phase-one deal in which China agreed to buy more American farm products. The administration says it also addresses major issues such as intellectual property theft, but the text hasn't been released. Lori Wallach of Global Trade Watch says Trump's erratic style has undermined U.S. trade policy with China.

LORI WALLACH: He basically, on a regular basis, send signals to China that has led them to think they can just wait us out. And that's too bad because we really do need a new China trade policy.

ZARROLI: Wallach says the administration did win a victory of sorts this month when the House finally approved a revised version of NAFTA. It potentially lowers the cost of some drugs by removing patent protections, and it requires higher labor standards for some American auto workers, which should help keep more jobs in the U.S. These were big concessions to Democrats and unions.

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TRUMP: It's an incredible deal for our country. Took too long - it waited in Congress for too long a time.

ZARROLI: The new agreement won't really have that much of an impact on the economy, says Chad Bown of the Peterson Institute. But he says it's good to know Trump won't be getting rid of NAFTA altogether. As for next year, Bown says the Trump administration has hinted it may open a new front in the trade war - against the European Union.

BOWN: President Trump himself has said at various times that the EU is even more problematic on trade than China is. And they have a number of actions potentially teed up early in 2020 that we're going to have to keep our eyes out for.

ZARROLI: That could include tariffs against autos imported from Europe. Europe and the United States do a massive amount of trade, and a trade war between them would be felt throughout the American economy.

Jim Zarroli, NPR News, New York. Transcript provided by NPR, Copyright NPR.