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"
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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."