Trade pacts typically require years of detailed negotiations. The North American Free Trade Agreement needed two years. Creation of the World Trade Organization took eight.
The Trump administration wants to remake global trade in a matter of months.
To secure agreements quickly, the White House has taken a contentious approach to negotiations not seen in decades, threatening allies and adversaries alike with harsh sanctions like tariffs and quotas. Those tactics have returned a few early concessions from trading partners, including South Korea, whose revised trade agreement was formally announced by the United States on Wednesday.
But it remains to be seen how much American workers would benefit from these deals and whether the global trading system can sustain the chaos.
President Trump and his chief trade negotiator, Robert Lighthizer, have set a series of crucial deadlines that are rapidly approaching. Temporary exemptions on imports of steel and aluminum from Australia, Brazil, Canada, the European Union, Mexico and South Korea have been scheduled to expire on May 1, and the Trump administration has been using that deadline as a cudgel to extract concessions from those nations.
Behold, the banana. Who’d have thought it would be one of the most contentious fruits of the 1990s? “It could be a spin doctor’s nightmare on either side of the Atlantic if a row about selling bananas sparks a multibillion-dollar trade war.” “Nobody with any sense wants a tit-for-tat trade war. That is a blind alley if ever I heard of one.” It’s a tale of how trade restrictions can trigger geopolitical feuds when countries use things like tariffs to protect their own industries. What became known as the banana wars started like this. European companies were importing fruit tax free from former colonies in places like the Caribbean, Africa and the Pacific to help support their developing economies. Meanwhile, Europe had tariffs and quotas that restricted the fruit that American companies were shipping to Europe from Latin America. And that limited their access to the world’s biggest market for bananas. The U.S., together with several Latin American countries, repeatedly turned to the World Trade Organization to mediate the dispute. “This case has been lost four times.” But before the W.T.O. ruled that it could strike back, the U.S. announced a plan to put tariffs on European luxury goods. And that got the Europeans mad. “What the Americans have done this last week is clearly unacceptable. It’s illegal and it’s outside the system.” Tensions ran high. Each side accused the others of breaking the rules. “The European Union is the largest member of the W.T.O. And if you allow them to get away with not abiding by the rules, you start to chip away at that system and saying, is the W.T.O. reliable? Can we count on it?” In 2009, Europe agreed to cut back its restrictions on Latin American bananas. But even disputes with a clear-cut resolution can seem to be part of a larger story. For example, what could be called the chicken wars is just one of many disputes between the U.S. and China. “The Obama administration will once again take action to hold China accountable.” Back in 2010, the Chinese accused the U.S. of dumping underpriced chicken onto its market. So China punished the U.S. with antidumping tariffs. The Americans went to the W.T.O. And they won. Years later, just a month after China lifted the chicken tariffs, President Trump started 2018 with a protectionist bang, widely thought to be aimed at China. He put tariffs on washing machines and solar panels, and made other threats too. “It will be 25 percent for steel. It will be 10 percent for aluminum.” Threats of retaliation poured in within days. “We are discussing different U.S. products from which import tariffs can be imposed.” Two weeks later, the president stoked growing fears that a trade war with China could be looming. He announced tariffs on consumer goods to punish China for stealing intellectual property from American companies. “This is the first of many.” The Chinese immediately responded with threats to retaliate against American products. These unilateral moves could test the strength of the global system for resolving trade disputes. Whether the product is technology, cheap chickens or, yes, even bananas.
The banana wars were spats that escalated, tariff by tariff, into a decades-long dispute between the United States and the European Union.CreditCredit…Vincent Tullo for The New York Times