No doubt we need policies that make international trade not only free, but also fair; and especially mutually beneficial with each of our trading partners. However, Trump administration’s trade policy —most notably its reliance on unilateral tariffs— marked a radical and destabilizing break from decades of bipartisan, rules-based economic engagement. Cloaked in nationalist rhetoric and justified by inflated claims about trade deficits and non-tariff barriers, these policies bypassed congressional oversight and disrupted global markets with little strategic gain. The administration relied on questionable economic assumptions; often conflating legitimate concerns about China’s conduct with exaggerated data and opaque methodology. While issues like forced technology transfers, currency manipulation, infringement of intellectual and industrial property rights, dumping and state subsidies, labor and environmental standards merit attention, most economists criticized the administration’s attempt to convert these into tariff-equivalent estimates as analytically unsound. Instead of leading a coordinated international response through negotiation or the World Trade Organization (WTO), President Trump resorted to improvisational trade aggression that fractured alliances and invited costly retaliation. The result was not a coherent strategy but a politically motivated power grab—one that weakened U.S. global leadership, destabilized economic relations. This article examines how that approach unfolded, who it harmed, and why restoring congressional authority and principled global leadership is now an urgent imperative for American trade policy.
The need for Congress oversight
President Trump’s sweeping use of trade statutes, particularly Section 232 of the Trade Expansion Act and the International Emergency Economic Powers Act (IEEPA), to impose tariffs without congressional approval raises serious constitutional concerns. These statutes, intended for exceptional use, were expanded beyond recognition to implement broad, long-term economic policy without legislative debate. Invoking vague national security justifications, the administration sidestepped the Constitution’s clear delegation of tariff authority to Congress under Article I. In response, a bipartisan coalition led by Senators Tim Kaine (D-VA), Ron Wyden (D-OR), Rand Paul (R-KY), and Chuck Schumer (D-NY) introduced the Resolution to Repeal Global Tariffs and Restore Congressional Authority Over Trade. Senator Kaine and Chris Coons (D-DE) also put forward the Stopping Tariffs on Allies and Bolstering Legislative Exercise of (STABLE) Trade Policy Act, requiring congressional approval before imposing tariffs on allies. These measures are not just good economic policy—they are necessary to restore the constitutional balance of powers.
As I have publicly argued in social media, Trump’s tariffs represent a protectionist experiment that harms the very American workers, businesses, and consumers they claim to protect. Rather than strategically targeting bad actors or incentivizing reform, these tariffs functioned as blunt instruments, blanket taxes that raised input costs, disrupted supply chains, and undermined U.S. competitiveness. Widespread re-shoring of industries is unlikely because the structural incentives that drove production abroad —lower labor costs, specialized supply chains, and regulatory arbitrage— still persist. Despite political rhetoric, most companies prioritize cost efficiency and market access, making it more practical to relocate operations to other low-cost countries rather than return to the U.S. Domestic re-shoring also faces barriers such as labor shortages, higher input costs, and a lack of infrastructure for certain manufacturing sectors. Without sustained investment, targeted industrial policy, comprehensive immigration reform and a long-term workforce strategy, re-shoring will remain more of a political talking point than an economic trend.
Instead of revitalizing domestic industry, Trump’s tariffs imposed new burdens on it. Worse still, they weakened longstanding trade alliances and made America a less reliable partner. Reasserting congressional oversight is therefore not only a constitutional imperative—it is essential to safeguarding economic stability.
Impact of Trump’s tariff in the Commonwealth of Virginia
Before delving into the broad, domestic and global disruptions caused by President Trump’s trade policies, I want to begin with their direct and significant impact on Virginia’s economy, where key sectors across the Commonwealth have been adversely affected.
In agriculture, Virginia’s farmers, particularly in the Shenandoah Valley, have faced serious challenges as key trading partners retaliated with increased tariffs on exports like soybeans and cattle, resulting in reduced demand and falling prices. The forestry industry has also been hit hard, with tariffs on lumber exports causing financial strain for companies like Meherrin River Forest Products, as it has been reported by Don Bright, a representative of the company in various interviews with the press. Manufacturing has not been spared; Volvo’s New River Valley plant in Pulaski County announced layoffs of up to 350 workers, attributing the decision to the negative impact of tariffs on heavy truck orders. The Port of Virginia, a critical hub for international trade, has experienced uncertainty and a decline in cargo volumes due to the tariffs, affecting the broader logistics and shipping industries. These developments underscore the widespread and multifaceted effects of the Trump administration’s trade policies on Virginia’s economic landscape.
Impact on U.S. Small Businesses and Contract Manufacturing with China
U.S. small businesses have long relied on global supply chains to remain competitive, and contract manufacturing—especially in countries like China—has been a key component of their strategy. These partnerships have enabled access to cost-effective production, specialized capabilities, and the scale needed at competitive prices to meet consumer demand. However, the imposition of tariffs by the Trump administration on Chinese imports has disrupted this model, introducing steep costs, uncertainty, and new operational challenges.
While exact figures are difficult to obtain, estimates and industry studies suggest that a substantial number of U.S. small businesses engage in contract manufacturing with China. In the biotechnology sector, a 2024 survey by the Biotechnology Innovation Organization (BIO) found that 74% of U.S. biotech companies contract with Chinese firms for clinical services and 30% for the manufacturing of approved medicines. China’s dominance in global manufacturing—accounting for nearly 28.7% of global production—has made it the default destination for outsourcing production, even for small enterprises. Industries such as tabletop gaming and fashion are illustrative of this dependence, with firms relying on China for components, final assembly, and distribution.
Trump-era tariffs have caused sudden and substantial increases in costs for small businesses importing goods or components from China. For example, recent reports highlighted voices of concern: Casey Ames, founder of Harkla, saw tariff expenses spike from $26,000 to $346,000 overnight, endangering the viability of physical products aimed at children with special needs. Lisa Lane, producer of Rinseroo shower hoses, anticipates $200,000 in additional annual costs due to tariffs and increased customs inspections. Contract manufacturers that source Chinese components face the same financial pressures—costs that ripple downstream to their small business clients. In industries like tabletop gaming, tariffs exceeding 60% have imperiled long-standing supply chains, with few domestic alternatives and rising concern over long-term survival.
Beyond costs, the unpredictability of trade policy under Trump’s tariff regime has created widespread unease among small business owners. Many have delayed expansion, hiring, and capital investment. Sharp declines in consumer and business sentiment reflect concerns about the fragility of supply chains and the risk of further disruptions. For businesses that rely on contract manufacturing with China, the tariffs are not merely a challenge to navigate but a threat to their long-term viability.
North American Integration: Strategic Assets, Not Trade Deficits
Take, for example, the U.S. goods trade deficit with Mexico, which reached $171.8 billion in 2024—$137.8 billion of which came from the automotive sector alone. On the surface, such a figure might be weaponized to justify punitive trade action. But in reality, it reflects the success of a highly integrated, cross-border supply chain where U.S. and Mexican workers co-produce vehicles through shared manufacturing platforms. Much of that trade “deficit” benefits U.S. automakers, who operate through subsidiaries and capture the profits from these exports. The lower production costs in Mexico translate into more affordable vehicles for American consumers, helping to ease inflation and expand market access. At the same time, the added corporate value strengthens the stock of U.S. companies, boosting retirement accounts such as 401(k)s and pension funds held by millions of Americans. Critically, the cost savings and scale enabled by this binational model also provide the financial headroom for U.S. automakers to invest in research and development—accelerating innovation in electric vehicles, autonomous driving, and fuel-efficient technologies. Far from being a liability, this trade structure is a strategic asset—delivering economic growth, environmental progress, and long-term prosperity for both nations.
The same is true for the U.S. trade relationship with Canada, which is often similarly misrepresented in political rhetoric. Canada is not only the United States’ second-largest trading partner but also a vital collaborator in key industries such as automotive manufacturing, energy, and critical minerals. Vehicles, parts, and materials regularly cross the U.S.-Canada border multiple times before final assembly, supporting jobs and production efficiency on both sides. In the energy sector, Canadian imports help stabilize American fuel prices and reduce reliance on unstable or adversarial suppliers. Much like with Mexico, U.S. companies benefit directly from trade with Canada through subsidiaries and cross-border operations, with returns flowing back into the U.S. economy and investor portfolios. These gains strengthen retirement savings across the country and fuel corporate reinvestment into future-focused sectors—like renewable energy, grid innovation, and clean vehicle technology. U.S.-Canada trade is not a zero-sum proposition; it is a model of shared economic sovereignty and regional competitiveness. As we confront global economic realignment, it is these North American partnerships—not protectionism—that offer a sustainable path to prosperity and security.
Trump’s tariffs will also strengthen China’s influence in Latin America.
Trump’s erratic tariff policies have also weakened U.S. economic and geopolitical standing in Latin America, creating openings for China to deepen its influence in the region. As reported by the New York Times, President Lula of Brazil is actively seeking to expand trade and infrastructure ties with China, capitalizing on the vacuum created by reduced U.S.-China trade. At the China-CELAC Forum, leaders from across Latin America—including Brazil, Chile, and Colombia—are aligning more closely with Beijing, which has pledged new investments in ports, railways, and supply chains throughout the hemisphere. U.S. tariffs not only disrupted global markets but alienated key partners in the Americas, undermining decades of diplomatic engagement. In effect, the Trump administration’s trade nationalism has handed China the strategic initiative in a region that has long been central to U.S. interests.
Trade with the EU: Strategic Cooperation Undermined by Tariff Escalation
Trade with the European Union represents one of the most balanced and rules-oriented economic relationships the United States maintains. The EU is collectively the U.S.’s largest services trading partner and a leading source of foreign direct investment and technological collaboration. Yet under the Trump administration, this relationship was strained by tariffs imposed on EU goods under Section 232—particularly targeting steel and aluminum—on the dubious grounds of national security. In response, the EU imposed retaliatory tariffs on iconic American exports such as motorcycles, bourbon, and agricultural products, turning a historically cooperative relationship into a tit-for-tat trade confrontation.
The irony of this approach is that it punished democratic allies who uphold labor, environmental, and intellectual property standards the U.S. claims to value—while failing to produce concessions from more problematic trading partners. Rather than aligning with the EU to address China’s unfair trade practices through a coordinated, rules-based agenda, the administration alienated its closest economic and geopolitical partners. This erosion of trust weakened the transatlantic alliance at a moment when global trade governance needs unified leadership. Restoring predictability and trust with the EU should be a cornerstone of any future U.S. trade strategy—not only to repair economic damage but to reinforce the global norms and institutions that the U.S. and Europe have built together over decades.
Understanding the Trade Deficit: No Emergency, No Justification for Overreach
Trade imbalances, such as the U.S. goods deficit, are not indicators of crisis but rather reflections of global capital flows—balanced through the capital account of the balance of payments. In 2023, the United States ran a current account deficit of approximately $545 billion, driven largely by a goods trade deficit of about $1.05 trillion, offset by surpluses in services and income. This was more than covered by $773 billion in net capital inflows via the financial account, which reflect strong foreign investment in U.S. assets—from Treasury bonds to equities. A small capital account ($1 billion) and a residual statistical discrepancy (–$230 billion) complete the balance sheet, resulting in a balance of payments that, by definition, nets to zero. Far from indicating a national emergency, these dynamics demonstrate that trade deficits are fully financed by voluntary capital inflows—driven by confidence in the U.S. economy and its institutions. To invoke emergency authorities like Section 232 or IEEPA in response to this balanced, routine economic mechanism is a distortion of both economic reality and statutory purpose.
Reclaiming Global Leadership Through Rules-Based Trade
That said, legitimate challenges persist with China and other trading partners whose conduct undermines the global trading system. These include forced technology transfers, intellectual property theft, industrial subsidies, and a failure to uphold labor rights and environmental standards. Addressing these issues is essential—but the solution lies in strategic, targeted diplomacy, not unilateral tariffs. The United States must lead efforts to reform and modernize the World Trade Organization (WTO), revitalize dispute settlement mechanisms, and negotiate high-standard agreements that embed democratic values in trade policy.
Most critically, the United States cannot afford to cede leadership in global trade governance to China. For decades, America has championed a vision of rules-based trade that expanded prosperity, reinforced alliances, and advanced democratic norms. If the U.S. retreats from that role, it leaves a vacuum for China and other authoritarian actors to redefine global standards in ways that benefit state control over free enterprise and erode transparency and accountability. From the WTO to emerging trade compacts, America must reaffirm its leadership—building coalitions, defending high standards, and shaping a trade order that reflects both its economic interests and its values. The future of fair trade, innovation, and democratic resilience depends on it.
Conclusion: Restoring Confidence, Stability, and Integrity
In conclusion, the Trump administration’s erratic and unilateral tariff policies have not only disrupted trade and harmed small businesses—they have also injected dangerous volatility into global markets. Rather than providing stability or predictability, the back-and-forth of tariff announcements and reversals has triggered sharp swings in equity markets, shaking investor confidence. Perhaps most concerning, it has raised red flags about potential insider trading and market manipulation. President Trump’s social media posts—such as his April 9, 2025 message urging Americans to “buy stocks” just hours before pausing tariff actions—have fueled suspicion that privileged individuals within his circle may have profited from advance knowledge of policy shifts. There is even video evidence of President Trump in the Oval Office speaking with Wall Street investors, openly bragging about how much money each had made during one of the market’s sharp upticks following his announcement to pause proposed tariffs—just one of many episodes of volatility triggered by his erratic trade policy. Such conduct undermines public trust and the integrity of financial markets. Creating economic uncertainty is the opposite of sound policy. A durable, competitive, and fair trade strategy requires transparency, stability, and adherence to the rule of law—not impulsive moves and insider advantage.
The recent Geneva agreement between the United States and China, which temporarily reduces tariffs for a 90-day period, is far from a resolution to the trade war unleashed by the Trump administration—nor does it address the deeper, structural issues at the heart of U.S.-China economic tensions. While the pause in tariff escalation may ease market volatility, it follows a now-familiar Trump pattern: create a self-inflicted crisis through unilateral overreach, then strike a partial or symbolic deal to claim political victory. In reality, the agreement sidesteps the core problems it purported to confront—such as China’s non-tariff barriers, forced technology transfers, and state-driven industrial policy. By focusing on headline-grabbing concessions rather than enforceable reforms, Trump’s approach once again prioritizes optics over outcomes, leaving American workers, businesses, and strategic interests exposed to the same risks that fueled the trade war in the first place.
In a recent opinion piece, economist Francisco Rodríguez contends that the Trump administration’s trade policies resemble a power consolidation strategy akin to those employed by neo-authoritarian regimes such as Hugo Chávez’s did in Venezuela. This approach turns economic policy into a tool for political control rather than a response to genuine trade concerns, eroding democratic norms in the process. That warning resonates deeply with me. As a former congressman in Venezuela, I witnessed firsthand how Chávez used economic powers—particularly over trade and currency—to sidestep legislative scrutiny and expand executive dominance. I fought to reclaim congressional oversight at every stage of that authoritarian drift. The parallels to Trump’s use of unilateral tariff authority are both clear and deeply concerning. Restoring democratic checks, institutional balance, and principled economic leadership is not only necessary—it is urgent.