FEBRUARY 28TH, 2024
Trade Talks: Are U.S. Trade Agreements Really One-Sided—Or Part of a Bigger Strategy?
Trade agreements are often a topic of heated debate. Some critics argue that the U.S. enters into deals that seem unbalanced—granting favorable terms to foreign countries while American businesses face steep competition. But what if these agreements serve a larger purpose beyond economics?
Trade policies don’t exist in isolation. They’re not just about tariffs, exports, and market access; they are often intertwined with national security, diplomatic relationships, and geopolitical strategy. What may seem like an uneven trade deal on paper could, in reality, be a key piece of a much larger negotiation—one that extends beyond commerce into global influence and stability.
What We Know…
Trade as a Strategic Lever
When policymakers negotiate trade agreements, economic interests are only one part of the equation. National security, diplomatic leverage, and long-term strategic goals often shape these deals as well.
Take the Philippines, for instance. Over the years, the U.S. has offered preferential trade terms that some consider overly generous. However, in exchange, the U.S. has secured critical military access to bases in the region—an invaluable strategic foothold in the Indo-Pacific, particularly in balancing China’s influence.
Similarly, the Korea-U.S. Free Trade Agreement (KORUS FTA) has been criticized for benefiting South Korean industries, especially in automotive manufacturing. Yet beyond trade, the U.S. maintains nearly 30,000 troops in South Korea, strengthening its security presence in East Asia while benefiting from advanced intelligence-sharing agreements.
Are “Unfair” Trade Deals Actually Geopolitical Investments?
For business owners, policymakers, and trade professionals, understanding the full scope of these agreements is crucial. While a deal might appear to favor another country in economic terms, it often supports broader U.S. interests, including defense cooperation, diplomatic alliances, and geopolitical stability.
Would the U.S. prefer a marginally better trade balance or a secure network of military bases worldwide? In many cases, strategic interests take precedence over immediate economic advantages.
The Case for Reviewing Trade Agreements
That said, trade policies should evolve with the times. The global economy has changed dramatically in recent years, with shifts in e-commerce, supply chains, and emerging markets reshaping the way business is conducted. Yet many existing trade agreements operate under frameworks designed for a different era.
One pressing issue is the de minimis rule, which allows low-value shipments to enter the U.S. duty-free. While originally intended to ease trade facilitation, the explosion of e-commerce has turned this into a loophole that enables a high volume of untaxed imports. Managing this challenge is complex—customs systems weren’t built to handle such a high transaction count—but it’s an issue that deserves careful examination.
Regularly reviewing trade agreements is essential to ensure they align with today’s economic realities. However, reform should be strategic, not reactionary. Abrupt, sweeping changes could disrupt businesses and strain international relationships, leading to unintended consequences.
The Bottom Line
Trade agreements are about more than just economic give-and-take. Many serve as strategic tools that reinforce national security, global influence, and diplomatic ties. While it’s important to ensure fair trade policies, it’s equally critical to recognize the broader role these agreements play in shaping international relations.
As the world of trade continues to evolve—driven by digital commerce, shifting supply chains, and emerging security concerns—periodic reviews of trade policies are necessary. The key is thoughtful, measured updates that maintain balance, avoid disruption, and uphold both economic and strategic interests.
By adapting trade agreements with foresight and precision, the U.S. can foster a system that promotes both fairness and stability—for businesses, global partnerships, and long-term national interests.
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