New England was built on the revolutionary spirit. When the British decided to impose unfair taxes and regulations on the goods that the colonies could consume – goods ranging from tea, stamps and everyday commodities such as sugar and textiles – our forefathers did not tolerate it. The British Empire forced them into a captive market: they could only consume the very products that they had just produced at a markup. It was this lack of choice and ability to trade that led to the American Revolution.
Today, our longest and most important allies are now seeking new trade deals to diversify their own trade relationships, as we force them into unfair deals. As our founding fathers would likely agree, the products we make are not meant to be consumed exclusively by ourselves. U.S. industries are now suffering as sourcing products becomes harder and people buying our goods no longer see the U.S. as a safe, predictable business partner.
Europe is the most important market we are losing. After 25 years of stalled negotiations, countless protests from farmers throughout the European Union, and disagreement amongst voting countries, Europe has negotiated the largest-ever free-trade agreement with Mercosur, an economic bloc of five South American countries, including Brazil and Argentina. This deal signals a massive shift in global trade attitudes. It is also no coincidence that it was finally pushed across the finish line just as the onslaught of tariffs began. This deal saves the European Union billions of dollars yearly and boosts the profits it makes through trading by the tens of billions.
Instead of imposing trade barriers and additional fees, the deal scraps tariffs on goods in critical sectors for both the EU and Mercosur, such as agriculture, manufactured goods and medicines. This translates to more availability of products at grocery stores, more availability of important tools and machines, and more business across the ocean for companies large and small. The deal was finalized in January. Only weeks later, the EU closed a trade deal with India, becoming what leaders called the largest free-trade agreement ever. EU exports will increase by another 107.6% from this, and 6,000 Indian firms now have easier access to European markets.
Canada is also seeking new opportunities amid fears of over-reliance on U.S. businesses. Beyond the U.S.–Mexico–Canada Agreement, our countries have deeply integrated economies, with even small mom-and-pop shops sourcing products from across borders. By pushing away our neighbors, we hurt people at home and leave open the opportunity for others to fill our shoes. China – our top buyer of soybeans – has decided to instead source proteins and fuel from another source, deciding that Canada can fill the gaps that the U.S. has left behind.
To avoid further unnecessary harm to our local businesses, I propose that the U.S. take two actions to stimulate business and give companies an advantage and an attractiveness to our global partners. First, diverting federal funds to small businesses to gain the skills and resources to better diversify in sourcing, rather than being punished for not complying with restrictive policies. Secondly, we must encourage industry collaboration on projects that will stimulate economic activity in both our own and our allies’ countries, enabling exchanges of knowledge and people as well.
When we no longer have any country that wants to purchase our goods, to whom will we sell? Tariffs did not make our allies reconsider their own deals. Instead, the tariffs pushed them to do what our forefathers once fought for: choose for themselves and diversify their trading relationships.
Dakota Watjen is a University of Rhode Island student double majoring in supply chain management and German.
