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handle is hein.crs/govehfs0001 and id is 1 raw text is: Congressional Research Service nforming Ih legislative d bate sino 1914 U.S. Trade Policy: Background and Current Issues Congress plays a major role in shaping, overseeing and legislating U.S. trade policy through its constitutional authority over tariffs and foreign commerce (Article 1, §8). Since World War II, U.S. trade policy has generally sought to advance U.S. economic growth and competitiveness by: (1) reducing international trade and investment barriers; (2) fostering an open, transparent, and nondiscriminatory rules- based trading system, including through the World Trade Organization (WTO); (3) enforcing partner countries' trade commitments and U.S. trade laws; and (4) offering relief to U.S. workers and firms adversely affected by unfair foreign trade practices and trade liberalization. The Biden Administration came into office with a stated focus on domestic economic issues and many trade policy initiatives remain under development. In contrast to President Trump's emphasis on unilateral trade actions, the Biden Administration has promoted an approach of working with partners and allies to address trade challenges, including at the WTO. Yet, many Trump-era unilateral trade restrictions remain in effect, and the Biden Administration has maintained a focus on addressing China's unfair trade practices and enforcing existing trade agreements, including as part of its worker-centered trade policy. Congress has deliberated on trade issues including supply chain resiliency, U.S.-China trade challenges, unilateral tariffs and exemptions, preference programs, trade agreements, and, most recently, potential trade responses to Russia's invasion of Ukraine. Trade Econormics and U.S. Trade Trends Economic theory generally holds that international trade is beneficial at the national level, but that the benefits and costs may be unevenly distributed or concentrated. Countries increase production and export goods and services in which they have a higher relative comparative advantage in skills or resources, and import goods and services unavailable domestically or less efficiently produced. Trade benefits can include more efficient resource allocation and productivity through competition, economies of scale, higher wages and job growth in exporting industries, and greater choice and lower prices for consumers and firms using imports as inputs. Costs can include job, wage, and firm losses through import competition and production relocation. The economic impact of trade liberalization is difficult to measure and widely debated, in part because other factors influence economic activity, potentially with greater effect (such as technology), and expanded trade may lead to shifts in the composition of economic activity, with growth in some sectors and decline in others. Most economists argue that expanded trade benefits the U.S. economy overall (as described above), but has contributed to job losses in some sectors and regions, including through offshoring, and that workers may require retraining or relocation to adjust to the resulting shifts in job opportunities and technologies. The United States is the world's largest economy and trader, and source and destination of foreign direct investment (FDI, stock basis). U.S. trade has expanded in recent decades (Figure 1) and U.S. markets and production Updated March 16, 2022 are more integrated globally, especially with emerging economies. Recent U.S. and global trade trends reflect ongoing pandemic and economic recovery effects. The 2021 top U.S. trading partners (goods and services, exports plus imports) were, as a bloc, the European Union (EU, $1,091 billion), and by country, Canada ($758 bn), Mexico ($725 bn), China ($716 bn), Japan ($280 bn), and Germany ($267 bn). The United States has a long-running overall trade deficit (imports exceed exports), with the goods trade deficit outweighing the services trade surplus. Most economists argue that macroeconomic variables (e.g., aggregate savings and investment; the dollar's valuation and role in global markets) exert a larger role on the U.S. trade deficit than trade policies or agreements. Figure I. U.S. Goods and Services Trade $3.0 us.$ in trillion Goods Imports $2.0 Goods Exports $1.0 Services Exports Services . I I I I I I Im ports 1991 1996 2001 2006 2011 2016 2021 Source: Bureau of Economic Analysis and Census Bureau. orm ponents of US. Trade Policy Congress sets U.S. trade negotiating objectives, enacts trade laws, programs, and agreements, and oversees executive trade functions conducted by a range of federal agencies. By statute, the U.S. Trade Representative (USTR) is the lead U.S. trade negotiator and coordinates trade policy through an interagency process, with formal public and private advisory input. Key policy components include Trade rules-setting, liberalization, and enforcement. Negotiation of trade agreements to open markets and set rules on trade and investment; enforcement of commitments via dispute settlement and U.S. trade laws. Export promotion and controls. U.S. support for export financing, market research, advocacy, and trade missions; licensing and control of strategic exports. Customs, trade remedies, trade adjustment. Regulation of borders; laws to address adverse effects of imports, national security threats, balance of payments, and unfair tariff and nontariff barriers to U.S. trade; assistance for dislocated workers and firms. Trade preferences. Duty-free access to U.S. markets for eligible developing countries and products, intended to encourage trade and spur their economic growth. Investment. Protection and promotion (through investment treaties and trade agreements); examination of inbound FDI for national security implications. U.S. Trade Laws and Policy Tools. Congress has delegated authorities to address trade-related concerns, such as unfairly traded goods (e.g., antidumping and countervailing duty laws). The Trump Administration

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