U.S. trade policy promotes economic growth through regulations and agreements that control imports and exports with other countries. From free trade agreements to bilateral investment treaties, learn how trade policy impacts the economy and your personal finances.

Frequently Asked Questions

  • What is trade policy?

    Trade policy refers to the agreements and regulations surrounding imports and exports between different countries. It is used to promote economic growth and competitiveness.

  • What are the main instruments of trade policy?

    The main instruments of trade policy in the U.S. are negotiating agreements, setting rules, and enforcing trade commitments and laws; supporting export financing and licensing, market research, and trade missions; regulating and adjusting laws on imports and exports; encouraging trade and growth with developing countries; and protection and promotion through investment treaties and agreements.

  • Who coordinates trade policy in the U.S.?

    The U.S. Trade Representative (USTR) coordinates and negotiates trade policy, but Congress is the arm that sets the U.S. trade policy objectives, laws, programs, and agreements, and oversees the USTR and other federal agencies involved in trade policy. The president is also allowed to negotiate trade agreements through the Trade Promotion Authority (TPA).

  • What is protectionism in trade policy?

    Trade protectionism is a stance that some countries adopt to protect their domestic industries from foreign competition. It may work in the short run to bolster domestic production and business, but in the long run, trade protectionism may make a country and its industries less competitive in international trade.

  • What is strategic trade policy?

    Strategic trade policy refers to agreements and/or treaties that put conditions on trade between countries. For example, this may happen when two exporting nations export goods exclusively to a third party country, or when two nations compete in each others’ markets. This implies that a strategic trade policy may focus only on trade that limits competition, leading to an oligopoly.

Key Terms

An infographic of Trade Protectionism with an image of a cargo ship with an American flag and the headline “Trade Protectionism and Its Methods” and four separate methods described. “1. Smoot-Hawley Tariff of 1930. It was designed to protect from agricultural imports from Europe. 2. When the government subsidizes local industries, That allows producers to lower the price of local goods and services. 3. Impose quotas on imported goods. No matter how low a foreign country sets the price through subsidies, it can’t ship more goods. 4. Deliberate attempt by a country to lower its currency value. This would make its exports cheaper and more competitive.”
Trade Protectionism
Image shows two women standing beside a tall chart. There is money falling from the sky. The first woman is wearing an old-fashioned frock with a large hat and feathers, as well as a corset. The other woman is wearing pinks lacks, a turtleneck, a denim blazer, and large modern earrings. Text reads: "The value of U.S. currency over the years: 1913 = $100 1920 = $197 1930 = $175 1940 = $142 1950 = $240 1960 = $299 1970 = $386 1980 = $794 1990 = $1,300 2000 = $1,722 2010 = $2,211 2018 = $2,529"
Why the Dollar Is Worth So Much Less Than It Used to Be
The History of NAFTA and Its Purpose
Dollar sign in oil
how does nato work? It offers protection of freedom and stability for members and their regions; NATO targets include weapons of mass destruction, terrorism, and cyber-attacks; NATO protection does not extend to civil wars or internal coups; When one NATO nation is attacked, all NATO nations will retaliate; NATO is funded by its members, with the U.S. contributing roughly 75% of NATO's budget.
NATO: North Atlantic Treaty Organization
Men eating in a soup kitchen during the US Great Depression
Those Who Don't Learn From Smoot-Hawley Are Doomed to Repeat It
Farmer loading community supported agriculture boxes from work shed into box truck for delivery
What Is the Current U.S. Trade Deficit?
Dollar Bill Detail
Dollar Decline vs. Dollar Collapse
Foreign Exchange Markets
The Market That Dwarfs the Stock Market
what to know about the us dollar as the global currency
Why the US Dollar Is the Global Currency
yuan dollar conversion
How a Tiny Change in the Yuan Can Panic Investors
dollar value in foreign currency
What Affects the U.S. Dollar Rate?
Value of Money
Who Decides How Much Money Is Worth?
Dollar sword and yen sword clashing in a currency war
Why Global Currency Wars Aren't as Dangerous as They Sound
current account
What Is the Current Account?
WTO protester
How the WTO Keeps Your Prices Low
Indonesian farmers protesting the WTO
The Real Reason Why the Doha Round of Trade Talks Failed
Warehouse worker updating stock in a mobile app
6 Pros and 6 Cons of NAFTA
Group of call center executives seated in a row working on their desktops.
What You Should Know About Outsourcing Jobs
Image shows what impacts the strength of the American dollar: When the Fed raises interest rates, the dollar's value gets stronger. If the euro weakens, the dollar strengthens. The large U.S. debt-to-gross-domestic product ratio can reduce the dollar rate
3 Reasons Why the Dollar Is So Strong Right Now
A worker inspects shipping containers
The Apple logo is accounted for in the capital accounts.
How Trademarks, Copyrights, and Drilling Rights Are Added to GDP
Image shows a folder open on the presidential desk. On the inside of the folder it reads: "The new changes to NAFTA." Inside the folder is a document that reads: "NAFTA: Features new auto manufacturing regulation; opens canada's dairy market to U.S. farmers; regulates mexican trucks crossing the U.S. border; offers more protection for patents and trademarks; reduces competition for U.S. companies selling products in canada; Restricts companies for file for chapter 11"
6 Ways Trump Changed NAFTA
WTO Bali Agreement
3 Reasons Why WTO Membership Is So Important
Woman working in banana packaging plant
The 2004 Trade Agreement That Made Bananas Cheaper
A protester wears a bandana that reads 'Reject Obama' during a protest against Trans Pacific Partnership Agreement (TPPA) outside the Global Entrepreneurship Summit on October 11, 2013 in Kuala Lumpur, Malaysia.
How the TPP Lives on Without the United States
A smiling woman holding a shopping basket in the produce section of a grocery store where prices are low due to NAFTA agreements
6 Hidden Benefits of NAFTA
Man in headdress (gutra) overseeing oil retention pond,
What the Riyal, Lev, and Krone All Have in Common
pile of foreign currency with wrench on top
How Foreign Exchange Reserves Affect You
A woman talks with a man.
When a Rise in a Nation's Financial Account Is Bad
Dock workers accepting imports
Why America Cannot Just Make Everything It Needs
Young woman purchasing coffee
Why Countries Peg Their Currencies to the Dollar
Mexican women breaking apart clay for making pottery
Six Negative Effects of NAFTA
Two cartoon men use a rope to pull a floating dollar and euro sign closer together with Transatlantic Trade
What Happened to the Trans-Atlantic Trade and Investment Partnership?
woman shopping at grocery store
Top 12 U.S. Bilateral Trade Agreements
Money mix of foreign currency notes
Does the Government Control Exchange Rates?
Coffee and coffee beans
Fast Facts About the World's Largest Trade Agreement
Strong Dollar
Why the U.S. Dollar Is So Powerful
6 Steps to Join the World Trade Organization
current account deficit
What Is the Current U.S. Account Deficit?
Workers harvesting lavender in Japan
What Trade Agreements Do We Have With Our Neighbors?
Effects of a Weak Dollar
How a Weak Dollar Can Hurt You Financially
FTAA protest
The World's Largest Trade Zone That Never Happened
Boehner and Obama agree on TPA
Does the President Negotiate Secret Trade Deals?
Love Imported Goods, But Hate Losing American Jobs?
6 Ways Exchange Rates Affect You Even If You Don't Travel
Trade cargo ships
How Trump Is Trying to Destroy the WTO

Page Sources

  1. Congressional Research Service. "U.S. Trade Policy: Background and Current Issues," Page 1. 

  2. Office of the U.S. Trade Representative. "Mission of the USTR."

  3. Library of Congress. "Legal Foundations of U.S. Trade Policy."

  4. Office of the U.S. Trade Representative. "Trade Promotion Authority."

  5. NATO. "What Is NATO?"

  6. World Trade Organization. "The GATT Years: From Havana to Marrakesh."

  7. World Trade Organization. "The 128 Countries That Had Signed GATT by 1994."

  8. World Trade Organization. "1.6 Most-Favoured-Nation Treatment."

  9. World Trade Organization. "What We Do."

  10. Corporate Finance Institute. "Current Account."

  11. USDA Foreign Agricultural Service. "U.S.-Mexico-Canada Agreement (USMCA)."

  12. FOREX.com. "Currency Reserves: What Are They And Why Do They Matter?"

  13. Congressional Research Service. "TPP: Overview and Current Status."