While these critiques are certainly important—and few Americans are likely to view price increases on consumer goods, health care, or car insurance as a result of the Trump administration’s tariffs as “winning,” particularly at a time when cost of living concerns are rightly prioritized—there are additional, more nuanced critiques that deserve attention. Even those closely following the ups and downs of the administration’s trade policy have been left with unanswered questions.
Where is the text of the agreement?
For one, it is unclear what the Trump administration agreed to, making exultant claims of “winning” difficult to justify. The administration has released no actual text of its latest agreements, leaving business and investors wondering what the terms of trade will be for the foreseeable future. At best, the deals announced in the last few months are framework agreements that will require far more detailed, likely contentious negotiating to conclude—that is, if they ever conclude. Nor is there any suggestion that Congress will ratify the administration’s agreements, enshrining them in law. Trump’s “deals” will instead remain executive agreements based on flimsy authority, which faces mounting legal challenges and could be overturned by the Supreme Court, having already faced deep skepticism from the U.S. Court of Appeals.
Even the emerging structure of the administration’s negotiations, which has become apparent over the last few weeks, leaves a lot of questions unanswered. The administration’s deals involve an agreement on tariff levels, usually somewhere between 10 and 20 percent, although some countries without deals—such as Canada, Mexico, Switzerland, and India—face higher tariffs. And there remain questions about whether exemptions were offered to different countries. For example, Swiss officials noted that it was their understanding that pharmaceuticals would not be assessed the 39 percent tariff rate facing other exports from their country. The deal between the Trump administration and the European Union also includes several discrepancies in interpretation, including on semiconductor tariffs and the potential for a deal to lower steel and aluminum tariffs.
Are purchase commitments real?
Another common component of the Trump administration’s announced deals are large, new purchase commitments from U.S. trading partners, presumably to close the trade deficit. Vietnam, for example, agreed to purchase $2 billion of agricultural exports from the United States; Japan agreed to buy $8 billion worth of U.S. goods, including corn, soybeans, fertilizer, and bioethanol. The European Union will buy $750 billion worth of U.S. oil and gas exports. And others will buy dozens of new Boeing airplanes.
But here, again, questions arise. The European Union’s pledge to buy three-quarters of a trillion dollars’ worth of U.S. oil and gas exports is widely seen as dubious, with oil and gas industry experts suggesting that the headline numbers are “completely unrealistic.” The United States shipped $318 billion in energy exports last year, meaning that to meet the Europe’s stated commitment, U.S. exporters would need to divert nearly all of their foreign sales to the European Union. But that’s not how energy exports work: U.S. exporters are not mandated to sell to a particular buyer. Instead, they sell to the highest bidder, which may well be an entity outside the European Union. In fact, as part of their trade “deals” with the Trump administration, Korea, Japan, and Vietnam also agreed to purchase more U.S. energy exports, making it further unlikely that the European Union will hit its target. For their part, EU officials have provided few details on how the purchases would work. EU refineries do not even have the capacity to process that much U.S. supplied oil and gas.
The other purchase commitments negotiated by the Trump administration likewise appear far less certain than initially reported. Vietnam’s commitment to buy $2 billion of additional U.S. agricultural exports sounds good on paper, but in reality, Vietnam signed several MOUs, which are unlikely to have the force of a legally binding contract. And if the president’s past is a guide, it is unlikely that commitments to buy future agricultural exports will ever be met. Moreover, even if Vietnam meets its commitment, $2 billion in new agriculture exports will be dwarfed by a far larger loss of market share in the Chinese agriculture market. In the first quarter of 2025, for example, U.S. agricultural exports to China were down 49 percent compared to the same time last year, cratering to some of the lowest levels in the last two decades. And, already, the market share once enjoyed by U.S. farmers and ranchers has been captured by others in Latin America, Canada, and Australia.
The agreement of many trading partners to purchase new Boeing airplanes is also problematic, putting aside the administration’s willingness to negotiate deals that benefit a private company that also made a significant donation to Trump’s inauguration. Japan agreed to buy 100 Boeing airplanes as part of its “deal” with the Trump administration. Vietnam, the United Kingdom, and Indonesia also made commitments to buy Boeing aircrafts. Bangladesh, Qatar, the United Arab Emirates, and Saudi Arabia made similar commitments as well, although they were not part of an official trade agreement. But can Boeing even deliver these planes? It has suffered from production delays, and its existing order backlog suggests that new orders will not be fulfilled for over a decade. This means that a country’s commitment to buy new airplanes today will be fulfilled (or not) long after the initial “deal” was announced.
How real are other countries’ investment commitments?
Many of the Trump administration’s new trade deals also include some sort of commitment to invest in the United States. Japan, for instance, apparently agreed to invest $550 billion into the United States annually, with 90 percent of the profits accruing to the U.S. government. The European Union announced it would invest $600 billion in the United States as well. And Korea committed $350 billion of investment into the United States, which the president claimed would be given to the United States and “controlled by the United States.”
While no one should downplay the importance of foreign direct investment to the health of the U.S. economy, the lack of concrete, public text makes these commitments highly questionable. The European Union is already acknowledging that it cannot guarantee its investment commitment and that new investments will need to come from its private sector. As some have pointed out, the numbers are even more absurd when it comes to Japan, whose investment commitment equates to agreeing to invest 13 percent of the country’s entire GDP in the United States. Questions have also arisen about Korea’s investment commitment. As Reuters noted, “It was not clear what the investment would involve, where the financing would come from, over what time frame deals would be implemented and to what extent their terms would be binding.”
Not surprisingly, there are already disagreements between the Trump administration and the United States’ trading partners on what was agreed to. Japan, for example, noted that profits from its investment will not accrue directly to the United States—as Trump had claimed—but “split according to the degree of contribution.” It also said that only 1 percent to 2 percent of its funding would take the form of investments and that the remaining would be loans, on which the interest would be paid to the Japanese government. That’s a far cry from the creation of a sovereign wealth fund that Japan was backing, which is how one White House official described it to The Wall Street Journal.
Indeed, the Korean trade ministry confirmed that its deal with the Trump administration is not even written down. Given the difference in language—as well as the challenge of translating complex trade terms—the potential for disagreements regarding implementation to emerge in such a verbal, handshake deal should not be underestimated.
Do these deals offer certainty?
Investors, foreign companies, and even some foreign governments seem to have concluded in their longing for certainty that any deal is better than no deal. EU President Ursula von der Leyen defended the European Union’s deal with the Trump administration by saying, for example, that it “creates certainty in uncertain times.” But that assumes that these “deals” will last—and there is no reason to believe they will. Trump’s earlier deals with Mexico and Canada did not stop him from making additional tariff threats. Mexico has now been threatened 12 times with new tariff threats in the last six months, despite agreeing to many of Trump’s original demands. Nor did the free trade agreement that the first Trump administration negotiated with Korea stop the president for threatening them with massive new tariffs.
Finally, along with its massive new country-specific tariffs, the Trump administration also announced last week a new 40 percent tariff on goods that are transshipped through one country instead of being exported to the United States directly from where it was produced. The 40 percent tariff is to be assessed on top of whatever the tariff rate is on the good had it come directly from its country of origin. According to The New York Times, the administration plans to announce new rules for assessing indirect shipments “in a few weeks,” citing a senior administration official. This adds significant uncertainty for businesses and trading partners alike, as the administration’s new definition of transshipment will likely focus on identifying and then penalizing Chinese content in exports destined for the United States. For countries that import large amounts of parts and materials from China, such a definition could see their effective tariff rate reach much higher than what was announced by the Trump administration.
The opportunity cost is enormous
Another important—albeit seldom mentioned—critique is the sheer opportunity cost of the Trump administration’s brazen unilateralism. Imagine if the president of the United States and multiple cabinet officials had spent so much of their time and political capital working with countries around the world to improve working conditions or increase wages for workers; brokering a new international agreement to address climate change; or ending the humanitarian crisis in Gaza. Or imagine if so much time and energy had been used to develop new international rules to limit the influence of social media on children or stave off the worst potential impacts of a coming AI revolution. It is a sad commentary on the state of current affairs that such leadership is not only unexpected from the American president but also hard to imagine.
Instead, the administration deployed the president—as well as the secretary of commerce, the secretary of treasury, the U.S. trade representative, and untold amounts of staff time—in countless meetings and high-level engagements to lock in 10 percent to 20 percent tariffs that raise prices for everyone and make the country’s business less competitive. Note, too, that a 10 percent to 20 percent tariff is likely nowhere near high enough to account for the cost disadvantage between producing in the United States and somewhere else. If anything, the administration’s new tariffs will only add unnecessary grist to the economic mill, reducing the country’s prosperity while achieving little in terms of moving manufacturing back to the country. Perhaps this is why the administration has had to take credit for Biden-era investments and investments that were already planned when touting its achievements.
Finally, there is the very real—although hard to quantify—damage the administration has done to the United States’ relationships with its traditional partners and allies. This should not be underestimated. Canada, Mexico, the European Union, Japan, Korea, and others have all been forced into trade negotiations which, to them, likely appear more like extortion than a pathway to mutually beneficial cooperation.
Reports suggest that the Trump administration even used EU defense as a negotiating tool, threatening to pull U.S. protection of the European continent unless the European Union agreed to its trade demands. The result is that, while the EU will pay a higher tariff than it wanted, it will surely seek to reduce its reliance on the United States—something that leaders across Europe are already demanding. Japan and Korea are now working more closely with China. Canada is seeking to expand its relationship with Europe. And Australia just announced a new green iron ore deal with Beijing.
Conclusion
In the end, the Trump administration may have coerced the country’s trading partners into agreements that not only ensure the death of the old international trading system but could ensure that the future of global trade rules will be written by others in opposition to the United States.