How is Trade Policy Made?


Previous Page



An Overview

Information Courtesy Congressional Research Service, IF11016

What have been the Overall Objectives of U.S. Trade Policy? 

The United States was a key architect of the global economic order that evolved after World War II, which established multilateral institutions to advance a rules-based, open trading system. Historically, U.S. trade policy has focused on supporting economic growth and jobs through trade, liberalizing markets by reducing trade and investment barriers through trade agreements and negotiations, enforcing trade commitments and related laws, and providing time-limited relief to companies and workers facing unfair or injurious import competition. Another key objective of U.S. trade policy has been to advance U.S. strategic goals by supporting economic development and integration of developing countries including through unilateral preferential tariff programs, strengthening regional alliances, and extending U.S. influence abroad. U.S. administrations outline key trade policy objectives in an annual trade policy agenda established by the U.S. Trade Representative (USTR). Over the past four years, the Trump Administration emphasized trade policies that support U.S. national security and preserve national sovereignty; negotiating “new and better trade deals”; strictly enforcing U.S. trade laws and protecting U.S. rights under trade agreements; and reforming the multilateral trading system. The Biden Administration has pledged to focus on enforcement of U.S. trade agreement commitments, particularly labor and environmental protections, pairing trade policy with domestic policy tools to spur greater production in the United States, and working with allies to confront global trade challenges.

Who is involved in the formulation of U.S. Trade Policy? 

At the nexus of foreign and domestic policy, U.S. trade policy comprises a distinct set of issues that shape U.S. participation in the global economy and relations with trading partners. It also affects the overall U.S. economy and standard of living of Americans, as well as specific sectors, firms, and workers. Controversial at times, U.S. trade policy historically has focused on supporting economic growth and jobs through more open and rules- based trade by negotiating and enforcing reciprocal trade agreements and other measures, while offering relief to specific segments of the U.S. economy affected by trade liberalization and “unfair” foreign trade practices. It also aims to promote trade and investment, while regulating these flows for national security, health, safety, and other reasons. Other goals are to support economic development in developing countries and expand U.S. influence abroad.

The Constitution gives Congress primacy over trade policy, specifically the power to levy tariffs and regulate foreign commerce. By contrast, the President lacks specific authority over trade, but has power over foreign affairs. The executive branch’s role in trade stems from the President’s power to negotiate treaties with other nations, and legislative grants of authority to adjust tariff rates and implement trade policy. The Office of the U.S. Trade Representative (USTR) and other agencies conduct trade functions under various authorities. USTR-led interagency and advisory systems aim to seek input and balance diverse interests to reach a coherent U.S. position on trade matters. The U.S. trade policy architecture has evolved to reflect changes in international trade, the U.S. economic position, and other factors. Congress has a keen interest in examining U.S. trade functions, agencies, and coordinating structure.

Branches of Government 


The legislative branch drafts proposed laws, confirms or rejects presidential nominations for heads of federal agencies, federal judges, and the Supreme Court, and has the authority to declare war. This branch includes Congress (the Senate and House of Representatives) and special agencies and offices that provide support services to Congress. American citizens have the right to vote for Senators and Representatives through free, confidential ballots.

The executive branch carries out and enforces laws. It includes the president, vice president, the Cabinet, executive departments, independent agencies, and other boards, commissions, and committees. American citizens have the right to vote for the president and vice president through free, confidential ballots. This section also includes executive departments and agencies and principally, the Office of the U.S. Trade Representative or USTR. 

The judicial branch interprets the meaning of laws, applies laws to individual cases, and decides if laws violate the Constitution. It is comprised of the Supreme Court and other federal courts.



Additional Actors 



The private sector, nongovernment organizations (NGOs), labor groups, and other stakeholders shape U.S. trade policy in a number of other ways.