How Trump 2.0’s trade war is very different compared to his first term

Brad Setser, senior fellow at the Council on Foreign Relations and one of the, if not the best, sources for information and analysis on trade and capital flows, charted the difference between President Trump’s trade strategy in his first term relative to this one in some short threads on X.

In summary: the data shows that 2018 was a trade war against mostly China, and this edition is not nearly as focused on America’s top geopolitical rival and source of its largest bilateral trade deficit.

Per Setser, the bulk of the $24 billion in revenues the Treasury collected in tariffs in May was not collected from the importers of Chinese goods.

The surge in tariff revenue is not just a China story, but also heavily linked to imports from the European Union, Mexico, Japan, Vietnam, and Canada.

Compare that to the period from 2018 up until this more recent multifront trade war, when the lion’s share of tariff revenue was attributable to imported Chinese goods:

It’s something to keep in mind as the initial 90-day watering down of reciprocal tariffs on most nations is poised to expire on July 9, with the Trump administration simultaneously saying that more trade deals are coming imminently, telling other countries that they’ll receive letters about higher tariff rates today and also indicating the deadline for collecting these levies would be pushed back to August 1.