Several ways of imposing asymmetric trade arrangements: Methods, successes and limitations of U.S. tariff policy

Countries that have compromised have agreed to asymmetrical deals in which they inter alia significantly improve access for American goods to their markets and raise the prospect of large purchases and investments in the United States. At the same time, they accepted a notable deterioration in their own access to the U.S. market in order to avoid even harsher treatment.

Moreover, tariffs have been unilaterally imposed on countries that have not yet reached an agreement with the United States, including two of its main suppliers - Canada and Mexico - as well as two leading nations of the “Global South,” India and Brazil. The named countries are currently seeking accommodations in order to reduce or avoid prohibitive surcharges.

This paper aims at understanding why some main U.S. partners accepted such onerous terms without mounting robust resistance - China being the notable exception. The answer lies in a combination of American strengths and counterpart weaknesses. The United States benefits from tactical flexibility, the sheer scale of its domestic market, a full-spectrum diplomatic approach and dominance in some critical technologies. In contrast, its interlocutors often suffer from security or technological dependencies as well as internal and international divisions that undermine cohesive responses.

However, U.S. policy faces economic limits stemming from its impact on consumers and businesses deeply integrated into cross-border supply chains. Furthermore, its tools dull when the opponent is a determined economic power with dominant positions in supplying products essential to large segments of the U.S. economy - namely, China.