The protectionist economic policies implemented under the “America First” slogan by the Trump administration have had profound and multidimensional effects on both the global trade order and the American economy. This process, which began particularly in 2018–2019 and is expected to continue in 2025 with new tariffs, has reshaped the United States’ (US) trade relations with major partners such as China, the European Union (EU), Canada, and Mexico.
Policies such as high tariffs, the renegotiation of trade agreements, and restrictions on foreign investments in strategic sectors aimed to address concerns over job losses in the manufacturing sector and income inequality. However, in the long term, these measures pose risks such as the contraction of global trade, increased production costs, and weakened international cooperation. The belief that growing external competition during globalization and job losses in manufacturing have deepened economic inequality in the US led the Trump administration to take such protectionist steps.
By imposing high tariffs on various countries, the US increased import costs to protect domestic producers in strategic sectors such as steel and aluminum. At the core of these policies was a series of measures referred to as a “trade war,” aimed at reducing the trade deficit and protecting employment. These high tariffs triggered retaliation from many countries, including China, escalating global trade wars. Rising protectionism led to restructuring in global production networks and disruptions in supply chains, increasing uncertainty in sectors such as technology, automotive, and agriculture.
The World Trade Organization (WTO) and the International Monetary Fund (IMF) have warned that such protectionist measures would shrink global trade and weaken economic cooperation between countries. According to analyses by the Tax Foundation, the tariffs implemented in 2018 and 2019 will reduce the US Gross Domestic Product (GDP) by 0.2% in the long term, shrink the capital stock by 0.1%, and cause the loss of approximately 142,000 full-time equivalent jobs. During this period, additional tax revenue collected reached nearly $80 billion, with the average direct tax burden per household estimated at $200–300. However, when considering the rise in final consumer prices and cost pressures in production, the real economic burden is thought to be much higher.
While the steel and aluminum sectors were protected in the short term, rising input costs weakened the international competitiveness of downstream industries like automotive. The new tariffs expected in 2025 are a continuation of the “America First” policy. Although high tariffs on imports from countries like Canada, Mexico, and China may increase US tax revenues in the short term, they will likely place pressure on economic growth and household incomes in the long term. The Tax Foundation projects a $1.1 trillion increase in federal tax revenues between 2025 and 2034, while also predicting a 0.4% contraction in economic output, resulting in an additional annual burden of $600–800 per household.
High tariffs on raw materials and intermediate goods may lead to increased costs and inflationary pressures, especially in integrated sectors such as technology and automotive. Furthermore, policies aimed at protecting domestic technological development may weaken innovation dynamics by reducing foreign competition, and may lower the efficiency of technology transfers and R&D investments.
In the short term, increased domestic production and the protection of jobs in sectors like steel and aluminum may improve satisfaction among workers and businesses, providing a political gain for the Trump administration. However, in the long run, rising protectionism has led to negative impacts such as encouraging other countries to adopt similar measures, damaging global trade and growth, fueling cost-push inflation through higher input prices, and straining US relations with countries like China and those in Europe. This situation is also paving the way for new regional integration projects and alliances. In conclusion, Trump’s protectionist economic policies implemented under the “America First” approach—and planned to be expanded in 2025—provide short-term protection to certain sectors but pose significant risks for both the American economy and the global trade system in the long term. While sectors protected by high tariffs may initially benefit from increased or preserved employment, rising production costs, slowing innovation, and shrinking international trade volumes may negatively affect overall economic efficiency. International institutions like the WTO and IMF question the sustainability of these policies and highlight the long-term benefits of free trade for growth, innovation, and consumer welfare
