To understand U.S. trade policy, it’s best to think of chaos theory: the search for a pattern behind seemingly haphazard events.

Donald Trump is the chaos agent in this case, threatening countries on a whim with sky-high tariffs like the Queen of Hearts thundering, “Off with their heads.” But beyond the seeming disorder, there is more of a Washington consensus on trade policy than is often not commonly recognized—and it dates back to the late Obama years.

No longer will the United States push for global trade deals like the successive rounds of tariff cuts and subsidy rules negotiated through the World Trade Organization and its predecessor. Instead, the goals are much more limited: trade deals among a handful of countries that focus on specific sectors like critical minerals or semiconductors. Such deals are reinforced by tariffs and industrial policy that rarely come before Congress for a vote.

Behind the shift is the looming challenge of China, a country that has benefitted enormously from free trade policies once championed by the United States, but has also used protectionist measures including vast subsidies and extensive industrial policy to turn itself into the world’s largest exporter and the United States’ most powerful military rival. Now the United States is aping some of China’s industrial policies and shifting to a trade policy that prioritizes economic and national security more than efficiency and lower costs. Free traders are an endangered species.

In preparation for upcoming talks between Trump and Chinese leader Xi Jinping, for instance, U.S. and Chinese negotiators have been discussing a “Board of Trade”—essentially a mechanism to balance trade by limiting Chinese exports to the United States and boosting U.S. exports to China.

While Democrats are broadly critical of Trump’s trade plans, they are also brandishing tariffs as a crucial trade tool. When Michigan’s Democratic governor, Gretchen Whitmer, wrote a Washington Postop-ed in November about hurting Michigan manufacturers, she made sure to say, “To be clear, I am not against tariffs outright.” As Scott Lincicome, a trade analyst at the Cato Institute, and one of a dwindling band of free traders in Washington, D.C., told Foreign Policy, “It took two world wars, a Great Depression and 70 years” to create a trading system where  China was allowed into the World Trade Organization. “We’re not flipping a switch and going back to that era.”

“Putting aside Trump and his unique love of tariffs, you could see a fairly coherent consensus on trade come out of Trump’s presidency in” the next five to eight years, Peter Harrell, who worked as a senior economics official in Joe Biden’s administration, told Foreign Policy.

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There’s still plenty to fight about. Democrats focus more on labor and environmental standards; Republicans more on eliminating taxes on U.S. firms. Democrats try to entice allies into deals; Republicans rely more on coercion.

And the new consensus on trade could backfire. Steep tariffs raise prices for consumers and hurt manufacturers who depend on imported parts, undermining economic growth. Those realities are adding to Trump’s unpopularity.

Heavy handed tactics also alienate trading partners and allies who can cut their own trade deals without the United States. Protectionism, by definition, limits the foreign competition that is often needed to rouse U.S. firms to innovate.

In the 1980s, for instance, President Ronald Reagan—remembered as a free trader, although he regularly turned to protectionist measures—negotiated deals to limit imports of fuel-efficient Japanese cars. That gave Detroit a chance to catch up. Instead, carmakers pocketed the higher prices as profits and continued to lose market share to Japanese rivals.

But these concerns have become secondary to the fear that without protection, China will eclipse the United States. “Economic security has become more important,”to the U.S. and other trading nations, said Wendy Cutler, a longtime U.S. trade negotiator who is now a senior vice president at the Asia Society Policy Institute. “This has become a necessary component of trade agreements these days.”

The shift in trade policy began in the waning years of the Obama administration, which often sued China at the WTO and won. Nevertheless, China didn’t change its protectionist policies and its exports soared. Lawmakers viewed Obama’s flagship trade project, the Trans-Pacific Partnership, which sought to create a free-trade agreement among a dozen Asia-Pacific nations, as so soft on China that the administration never dared bring it for a vote.

By the end of his term, the Obama team was blocking reappointments to the WTO’s appeals panel, which it viewed as too friendly to Beijing, and nixing Chinese efforts to buy U.S. semiconductor companies.

The Trump administration turned the heat much higher, fighting a two-year trade war with Beijing in which it imposed tariffs on three-quarters of everything China sold to the United States. The COVID pandemic accelerated the focus on economic security, as the United States struggled to produce enough protective face masks, COVID tests, and other gear in sectors dominated by China.

Although Biden criticized Trump’s trade policies during the 2020 campaign, his administration largely continued Trump’s protectionist approach—and its effective circumventing of Congress on trade in favor of presidential authority. Biden retained Trump’s tariffs on China—even increasing some of them—and toughened Trump’s restrictions on exports to China of advanced technology.

In his second administration, Trump has tamped down his rhetoric on China as he prepares for a May meeting with Xi Jinping in Beijing. But he has lifted effective tariffs higher: Even after the Supreme Court decision blocking Trump from using emergency powers to impose tariffs, U.S. tariffs on China now average nearly 30 percent, up from about 21 percent when he took office.

His trade negotiators have also put together bilateral trade deals that require countries to align their trade policies with the United States—and against China. The provisions are “the most detailed commitments on economic security ever included in a legally binding trade agreement,” Geoffrey Gertz, a former Biden National Security Council official now at the Center for a New American Security, wrote on LinkedIn at the end of last year.

The contest with China requires bringing others on board—as hard a task for protectionists as it was for free traders. The last attempt to negotiate a global deal to liberalize trade, the so-called Doha Round, collapsed in 2008 when the United States and Europe realized they could no longer pressure big developing nations like India and Brazil to agree with their approach of slashing tariffs and reducing agricultural protection. Since then, U.S. administrations (Democrat and Republican alike), have tried to assemble what have been called “coalitions of the willing,” echoing George W. Bush’s description of those who supported the war in Iraq.

The trade efforts sometimes panned out as poorly as Bush’s invasion of Iraq. TPP flopped under Obama. Trump 1.0 tried and failed to negotiate a common front with the European Union and Japan on Chinese subsidies. Biden gave up on traditional trade deals altogether. His was the first administration since at least John F. Kennedy’s to fail to negotiate a major trade deal.

Instead, the Biden administration pushed what was called the Indo-Pacific Economic Framework, and sought deals with Asian nations on trade, supply chain resilience, and green technology. But unlike past efforts, the United States didn’t offer tariff reductions or other trade inducements to seal these deals. In the end, IPEF produced committees and conferences that accomplished little and are now dormant. “It was insufficiently ambitious,” said Gertz,  the former Biden NSC official, in an interview with Foreign Policy.

Surveying the wreckage of earlier coalition building, Trump 2.0 has generally chosen to negotiate one-on-one deals where it can use the threat of tariffs as leverage. Crafting deals with all 166 members of the WTO seems hopeless, so Trump’s team is trying a shortcut. The nine bilateral agreements it has negotiated all follow the same model.

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Another approach is narrowing the scope of agreements. Traditional trade deals incorporate many different sectors, so trading partners can swap concessions in one area for gains in another. The North American Free Trade Agreement between the United States, Mexico, and Canada, for instance, covered numerous industrial and agriculturall sectors. But the wheeling and dealing enormously complicates trade negotiations, which can stretch for years. The last global WTO deal, called the Uruguay Round, took more than seven years to negotiate.

Instead, both the Biden and Trump administrations have focused heavily on specific sectors. The first Trump administration started the ball rolling on semiconductors, promising Taiwan Semiconductor Manufacturing Co., the global leader in advanced chips, rich subsidies if it would build plants in the U.S. But it wasn’t until the Biden administration that the subsidy plan got funding under the CHIPS Act.

Although Trump has blasted those handouts as unnecessary and a “horrible, horrible thing,” he hasn’t moved to cancel them. Rather, he has sought to strengthen them by imposing tariffs on many semiconductor imports, giving leading chip makers another nudge to build in the United States.

Trump 2.0’s biggest sectoral effort is aimed at increasing the supply of rare-earth minerals used in automobiles, semiconductors, and advanced technology. China’s dominance in the field has given it enormous leverage over the United States. When Beijing slowed exports of minerals and magnets in April 2025, it threatened to cripple U.S. automaking.

In response, the administration is cobbling together what Vice President JD Vance called a “preferential trade zone for critical minerals” involving several dozen countries with rare-earth deposits. The trade zone would set a minimum price for critical mineral trade to encourage investment in mining and processing. To prevent subsidized Chinese miners from undercutting the trade-zone partners, lower-cost minerals would be hit with tariffs.

If it works, the United States and its trading partners would pay higher prices for minerals, but they would also have an expanded supply that doesn’t rely on China. Yet Chad Bown, a trade expert at the free-trade Peterson Institute for International Economics, points out that the scheme requires subsidies all along the supply chain. Not only would miners need to be subsidized via the price floor but so would processors and the ultimate buyers: Why would Ford buy a non-Chinese battery if it were more expensive, unless it too received a subsidy?

“It’s super-ugly,” Bown said. “There is no easy way to deal with this.”

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Trying to coordinate trade agreements with other aspects of policy is also challenging. Biden pledged to create a “united front” against China. His administration put together a nuclear submarine building coalition, called AUKUS, between the United States, Australia, and the United Kingdom, and created what it called a “latticework of nations,” including Japan, South Korea, and the Philippines, to counter Chinese influence. At the same time, the United States aligned with Japan, Taiwan, and the Netherlands to try to prevent China from obtaining the most advanced semiconductor chips.

To the consternation of former Biden officials, Trump has eased the export restrictions somewhat, allowing export of some advanced Nvidia chips used in artificial intelligence software in return for a cut of the deal (being paid through unspecified mechanisms to the U.S. government). “We’re essentially solving China’s problem for it, and that makes no sense to me,” Jake Sullivan, who served as Biden’s national security advisor, said in a recent interview with The Wire China.

Trump’s trade advisor, Jamieson Greer, has instead used trade deals to attempt a united front. Trade deals so far negotiated with Taiwan, Malaysia, Indonesia, Bangladesh, Cambodia, Argentina, El Salvador, and Guatemala all contain a section titled “economic and national security,” which commit the partners to align their trade policies with the United States, although the specific language varies a bit.

In Malaysia, the trade pact has sparked controversy. Opposition leader Mohamed Azmin bin Ali called the pact “a surrender of sovereignty” and said it could force Malaysia “to take sides in other people’s conflicts.”

From the U.S. side, that is the point—forcing countries to line up with the United States when Washington’s reputation has cratered in many countries. For now, the commitment is only on paper. The United States hasn’t tried to force countries to boost tariffs or other restrictions on Chinese trade and may not, knowing that it would be bound to anger China and risk another cutoff of rare earths. But the deals clearly signal the new direction of U.S. trade policy. “It gives the U.S. a basis for complaint if a country is working with China,” said a former Trump trade official, who spoke on the condition of anonymity.

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Whoever succeeds Trump in 2029 will inherit an international economic policy heavily reliant on tariffs. Levies are bound to continue, although sky-high rates will give Trump’s successor plenty of room to woo potential allies with offers of tariff reductions. In the 1960s and 1970s, the United States used the lure of greater access to its markets to bolster its defense against the Soviet Union. Now, that target is China.