Trade Dilemma of Global Hegemony: Analyzing the Transition in US Trade Policy from Globalization Deals to Hybrid Deals

1. Introduction

On April 27, 2023, National Security Advisor Jake Sullivan delivered a speech on “Renewing American Economic Leadership”, also known as the “New Washington Consensus”. Regarding trade policy, Sullivan emphasized the importance of the United States moving beyond traditional trade agreements and embracing innovative international economic partnerships. He commended the Indo-Pacific Economic Framework (IPEF) and the United States–Mexico–Canada Agreement (USMCA) for their contributions to mutually beneficial outcomes for America. Sullivan not only encourages financial capital to play a significant role in investing in emerging economies but also highlights the implementation of “industrial policies” aimed at improving industrial manufacturing capabilities, creating employment opportunities, and increasing income (Sullivan, 2023).

The USMCA and IPEF are indeed concrete manifestations of the “New Washington Consensus”. In December 2018, the USMCA replaced the North American Free Trade Agreement (NAFTA) and came into effect. It was updated to ensure that American workers, farmers, ranchers, and businesses can share the benefits. The USMCA incorporates “modern rules” such as competition policy, intellectual property, and digital trade, while also imposing stricter provisions on labor rights, including raising the standard of origin and minimum wages for the auto industry (Scherrer, 2020). Similarly, the IPEF aims to benefit workers and consumers. It has four pillars: trade, supply chain, clean economy, and fair economy. Since the launch of IPEF in 2022, various concerns of the US have been included in the negotiation framework, such as labor, environment, digital economy, and trade facilitation. However, there is a noticeable lack of content on tariff reduction and market access, which are the issues that participating countries are most concerned about.

Executing a vertical comparison between the actively promoted IPEF and abandoned Trans-Pacific Partnership (TPP) negotiations, as well as the current USMCA and replaced NAFTA, we can observe a significant change: now, the United States is seeking to balance the interests of different domestic interest groups, with a particular emphasis on protecting American workers. This shift in US trade policy raises the question: Why has the US deviated from traditional trade practices? And what are the implications for global hegemony?

The current literature on factors influencing US trade policy can be categorized into three main perspectives: (a) hegemonic superiority and power dynamics, (b) domestic economic conditions, and (c) lobbying competition and election politics. According to the hegemonic stability theory, a hegemony provides public goods such as open markets, economic stability, and a secure environment during its period of strength. However, as the hegemony’s power declines, its willingness and ability to provide these public goods diminish (Gilpin, 1981). The rise of China and other emerging powers has led the United States to change its traditional trade policy (Hopewell, 2021). The US has implemented protectionist measures specifically targeted at China. These measures involve employing economic statecraft strategies and imposing trade barriers (Kim et al., 2019). These policies can be interpreted as instruments aimed at preserving American hegemony (Guillén and Torres, 2023).

The economic conditions of the United States also significantly influence its trade policy. During economic downturns or recessions, the government may implement protectionist measures to protect domestic industries and jobs from foreign competition. Conversely, during periods of economic growth and prosperity, the government may reduce tariffs to promote international trade and stimulate economic growth (Kim, 2018). However, another analysis suggests that both liberal and protectionist trade policies have been consistently used as tools in international trade (Williams, 2019). Wraight described Trump’s policy as a form of “neoliberal protectionism”, which combines elements of neoliberalism with protectionist measures (Wraight, 2019).

Numerous studies emphasize the significant role of interest groups in shaping legislators’ stance on trade policy (Lee et al., 2023). The distributional effects of trade create winners and losers within a country, leading to different preferences on trade policy among various industries and individuals (Oatley, 2017). Through political lobbying, these groups advocate for policies that align with their specific interests. For instance, export-oriented industries and businesses that rely on imported raw materials and parts tend to favor free trade policies (Kim, 2017), while import-competing industries and individuals who experience income losses from free trade are more likely to resist such policies (Osgood, 2018).

Another factor to consider is the influence of election politics on trade policies. The preferences, power dynamics, and anticipated reactions of the electorate can impact the formulation and implementation of trade policies (Chaudoin, 2014). In advanced economies with plurality electoral systems, political parties may adjust their stance on trade policy to gain the support of specific voter groups (Schonfeld, 2021). During election periods, politicians may support protectionist policies to cater to the needs of certain voter groups (Conconi et al., 2014). The rise of populism has further highlighted the influence of election politics on trade policy (Rodrik, 2021). For example, Donald Trump employed populist rhetoric and the “America first” principle to attract voters who were strongly dissatisfied with free trade (Skonieczny, 2018).

Existing studies offer significant perspectives regarding the factors influencing US trade agreement negotiations at both international and domestic levels. However, these studies often lack a comprehensive framework and fail to fully integrate various perspectives, resulting in a partial understanding of the changes in US trade policy. This study aims to establish a framework that elucidates the causality and interactions of key variables in the trade policy-making process. By examining these dynamics, this study provides valuable insights into the factors driving US trade policy decisions and sheds light on the complex dynamics between global hegemony, domestic social conflicts, and international resistance.

2. Trade Dilemma of Global Hegemony and Four Types of Trade Policies

2.1. Inherent conflicts of hegemonic foreign trade

Since the 1980s, neoliberal economic policies have been gradually promoted and implemented globally. The United States has adopted reforms emphasizing marketization, liberalization, and decentralization, reducing government intervention in the economy. These policies have created a conducive environment for the expansion of transnational capital, providing multinational corporations (MNCs) with expanded market access, reduced trade barriers, and unprecedented opportunities for global expansion. Due to the United States’ endorsement of open markets, other countries have been inclined to collaborate with the US instead of opposing its dominance (Lundestad, 1986). The US has pursued liberal trade policies not only to expand its own economic opportunities but also to strengthen its position as a global economic leader (Ikenberry, 2011). The United States has built a global empire through the control of international financial institutions, the dominance of the US dollar, and the global spread of transnational corporations (Wade, 2003).

Although neoliberal trade has contributed to an increase in overall incomes, these benefits are not evenly distributed, inevitably leading to winners and losers within a country (Lake, 2009). In the US, neoliberal trade policies have exacerbated economic inequality and undermined workers’ rights. This has created a sense of economic insecurity and resentment among those negatively affected by globalization, fueling the rise of populism and deepening social divisions (Rodrik, 2021). Doug Stokes (2018) argues that the conflict between losers and beneficiaries can undermine the domestic political foundation of US global hegemony, giving rise to the “Great Delusion” described by John Mearsheimer, which refers to the flawed belief that states can foster a world order based on cooperation and mutual interests (Mearsheimer, 2018).

Based on the analysis above, a framework can be established to comprehend the trade dilemma of global hegemony (see Figure 1). It consists of two conflicting dimensions: the international dimension and the domestic dimension. In the international dimension, the hegemonic power needs to maintain global legitimacy through reciprocal trade, open up global markets, and establish corresponding rules, norms, or institutional systems. In the domestic dimension, reciprocal trade with other countries can harm the interests of disadvantaged industries and low-skilled workers within the hegemonic country, and this long-term imbalance can intensify domestic social conflicts. Therefore, the hegemonic country is faced with the dilemma of maintaining global hegemony while also conciliating domestic social conflicts.

2.2. Four types of hegemonic trade policies and their outcomes

The development process of unbalanced integration demonstrates that different kinds of global hegemonic trade policies can yield varying outcomes on both domestic and international fronts. The trade policy can be categorized based on international negotiation methods and domestic interest distribution. In the international dimension, global hegemony can employ two types of negotiation modes: reciprocity and unilateralism. Reciprocity entails the United States offering market access or concessions in exchange for other countries accepting certain terms or agreements. Unilateralism, on the other hand, involves the United States leveraging its power advantage to coerce other countries into satisfying US interests.

In the domestic sphere, three modes of interest distribution can be distinguished: globalization deal, close-market deal, and hybrid deal. The globalization deal prioritizes the interests of transnational capital, focusing on market opening and modern trade rules that facilitate the flow of goods and services across borders. The close-market deal refers to a trade policy that restricts or limits the flow of goods, services, and investments between a country and the rest of the world, aiming to protect domestic industries and local workers from foreign competition. The hybrid deal recognizes the domestic conflict between transnational capital and low-skilled workers, seeking to reconcile this conflict by establishing agreements that satisfy the interests of both groups. However, as a global hegemony, the United States has broad interests in the international arena and cannot adopt a completely closed market policy, making the globalization deal and hybrid deal common types of trade policies.

Considering the integration of various modes of international negotiation and the distribution of domestic interests, four types of US global trade policies can be identified (see Table 1). Type 1: When there is no urgent need to maintain global hegemony or reconcile domestic social conflicts, the hegemony may resort to unilateralism to coerce other countries into accepting globalization deals. This approach can maximize its own interests through globalization, but it may lead to a crisis of hegemonic legitimacy and domestic social discontent. Type 2: If maintaining global hegemony is a priority, but reconciling domestic social conflicts is not, the hegemony utilizes reciprocity to incentivize other countries to engage in globalization deals and maintain the liberal international order. However, this approach may harm the interests of domestic groups with low competitiveness. Type 3: If reconciling domestic social conflicts becomes a pressing need, but maintaining global hegemony is not a priority, the hegemony adopts offensive unilateralism to advance self-interest through hybrid deals that accommodate the mutual interests of domestic groups. However, this approach may be resisted by trading partners due to its detrimental effects on their interests. Type 4: If there is an urgent need to both maintain global hegemony and reconcile domestic social conflicts, the hegemony will attempt to use reciprocity to promote hybrid deals. However, due to the inherent contradictions described above, international cooperation between the hegemony and its trade partners will be difficult to achieve.

Since the 1980s, the US has pursued a neoliberal policy and facilitated the global expansion of transnational capital. However, as social conflicts intensify and populism rises within the United States, the core issue lies within the “domestic dimension”. Consequently, the US global trade policy has shifted from pursuing globalization deals (type 2) to adopting a more hybrid approach (type 3 or type 4).

3. Globalization Deals and US Domestic Conflict

3.1. Economic implications: Damage to the interests of US low-skilled workers

For the US, the outcomes of globalization deals have been mixed. NAFTA, which took effect in 1994, is a prime example of the traditional American free trade agreements. On one hand, US trade with Mexico and Canada saw significant growth. Overall trade between the three NAFTA partners increased from about $290 billion in 1993 to over $1.2 trillion in 2017, and total foreign direct investment among member countries also grew significantly (Sonneland, 2018). On the other hand, NAFTA has led to the outsourcing and offshoring of jobs to Mexico, where labor costs are lower. Since NAFTA was implemented in 1994, the garment manufacturing sector has seen a dramatic decline in total employment of nearly 88.5%, as of June 2022 (US Bureau of Labor Statistics, n.d.). And the Great Lakes region, known for its concentration of automobile manufacturing, has experienced slower per capita GDP growth compared to the overall growth rate of the United States from 2003 to 2015 (Bureau of Economic Analysis, 2023).

Similarly, trade between the US and TPP countries increased the overall US earnings but caused the loss of manufacturing jobs (see Figure 2). A quantitative study estimated that by 2025, the TPP could increase global income by $295 billion annually, with the United States benefiting by $78 billion per year (Petri et al., 2012). However, US participation in the TPP could exacerbate economic insecurity for certain Americans. In 2015, the US goods trade deficit with the 11 TPP countries reached $177.9 billion, resulting in the loss of 2 million jobs, including approximately 1.06 million manufacturing jobs. The largest losses occurred in motor vehicles and parts, with 738,300 jobs lost or displaced, equal to 36.4% of total jobs lost. Joining the TPP would further worsen these challenges (Scott and Glass, 2016).

Free trade has also led to a decrease in wages for low-skilled workers in the most affected industries and areas in the US, contributing to income inequality among different groups and regions (Hakobyan and McLaren, 2016; Rickard, 2020). From 1980 to 2016, the income share of the top 10% increased from 33.85% to 45.32%, while the income share of the bottom 50% decreased from 20.09% to 13.03% (see Figure 3). Cheaper imports have benefited many regions, but states in regions traditionally associated with low-wage industries, such as the Southeast and South-Central regions, have faced relative disadvantages due to competition from imported goods. Escalating economic inequality has resulted in the decline of the middle class and heightened economic insecurity for low-income families. It has also influenced the social structures and preferences for social policies among workers in different regions (Walter, 2017).

3.2. Political implications: Impact on US presidential elections and policy choices

This discontent among industry workers regarding free trade has fueled populism. While the impact of NAFTA on US deindustrialization is multifaceted, populist narratives often simplify it as a significant factor worsening the challenges faced by low-skilled workers (Lester and Manak, 2018). This sentiment has created a force that can influence election results in swing states, particularly in the Midwest (McQuarrie, 2017).

During the 2016 US presidential election, Donald Trump campaigned on an anti-establishment platform that emphasized the “America first” principle and the slogan “Make America Great Again”. He employed populist rhetoric to appeal to voters who were disillusioned with what they perceived as collusion by mainstream parties to support neoliberal economic policies that embraced open trade (Skonieczny, 2018). Trump made campaign promises to withdraw from TPP and renegotiate NAFTA in an effort to revive the manufacturing industry and protect workers’ interests. Trump’s remarks resonated with low-income white workers in the Great Lakes region. Whites without a college degree made up 34% of voters, and 67% of this group voted for Trump, while only 28% voted for Clinton (Fidel, 2016). This represents a margin larger than any previous Republican presidential candidate, and their support played a pivotal role in his victory in key swing states and overall success in the 2016 election.

The 2020 election was impacted by various factors, including the COVID-19 pandemic and economic instability. Nevertheless, Trump’s share of the white non-college voter group remained at 65%, similar to his performance in 2016. Biden was able to secure 33% of this group’s votes, an improvement over Hillary Clinton’s 28% in 2016 (Igielnik et al., 2021). It’s worth noting that Biden has long supported open trade arrangements. However, during the 2020 presidential campaign, he stated that the US wouldn’t enter into any new trade agreements until significant investments had been made in the domestic workforce (Friedman, 2020). Biden’s campaign website lists mobilizing American manufacturing and innovation as one of the four pillars of his “Rebuilding a Better Economic Recovery Plan”. He also emphasized the importance of unionization and collective bargaining. Biden voiced support for USMCA, which strengthens the enforcement of labor and environmental standards. Ultimately, Biden won back key states like Michigan, Wisconsin, and Pennsylvania, while Indiana and Ohio continued to vote for Trump (Federal Election Commission, 2022).

Although the expansion of transnational capital helps maintain US global hegemony by enhancing its global competitive advantage, the government had to optimize the distribution of benefits and reconcile US social contradictions as domestic workers’ opposition to free trade intensified. While both presidents emphasized defending the interests of the working class during their campaigns, Biden placed more emphasis on the government’s active management of globalization rather than simply wishing it away. Actually, he not only recognizes the importance of international cooperation and global trade, but also emphasizes the need to ensure trade practices that benefit American workers and protect their interests. This approach aims to strike a balance between protecting American workers and maintaining global hegemonic competitiveness. However, due to the dilemma of global hegemony, this balance is doomed to be difficult to realize.

4. Hybrid Deals and International Discontent

4.1. USMCA: Promoted as a hybrid deal through unilateralism

Different interest groups have different preferences for trade policies. Regarding the renegotiation of NAFTA, the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) proposed implementing stricter rules of origin in the automotive industry and eliminating government procurement clauses that violate “Buy American” rules (AFL-CIO, 2016). The United Automobile Workers (UAW) presented six demands, including safeguarding manufacturing employment, eliminating company privileges, and advocating for higher wages (UAW, 2017a). It also called for the establishment of labor standards (UAW, 2017b). However, the US Chamber of Commerce (2017) proposed a “Modernization of NAFTA” program to the USTR. It encompassed the digital economy and e-commerce, intellectual property protection, and trade facilitation. They also emphasized the importance of data flows, privacy and cybersecurity regulations, and protecting intellectual property. Moreover, the US Chamber of Commerce and the National Association of Manufacturers (NAM) jointly urged the prioritization of excluding new tariffs, expanding access to government procurement markets, and modernizing rules (Bolten et al., 2018).

On July 17, 2017, the USTR released the NAFTA re-negotiating objectives, which included reducing America’s trade deficit, strengthening new topics such as the digital economy, labor standards, and environmental protection, reducing market-distorting practices by state-owned enterprises, and excluding unfair subsidies and cumbersome restrictions on intellectual property rights (USTR, 2017). Under the guidance of these objectives, the United States has put forth a series of demands, but Mexico and Canada strongly oppose them: the removal of dispute settlement mechanisms; changes to rules of origin and the implementation of quantitative trade restrictions; reversal of access to government procurement contracts; and the revocation of access to cross-border trucking services. These issues became the most significant obstacles in the NAFTA renegotiation (Bahri and Lugo, 2020).

As Canadian Foreign Minister Chrystia Freeland said, the renegotiation of NAFTA could be seen as a unilateral measure taken by the United States, with expressed intentions for trade disputes throughout the process (see Table 2). Although Mexico and Canada retaliated against the “unacceptable tariffs” on steel and aluminum, they had to make compromises overall to avoid more detrimental consequences. These threats were effectively due to power relations stemming from asymmetries in economic dependence. In 2018, Mexico’s export partner share to the US was 79.19%, while Canada’s was 74.93%. On the other hand, the US’ export partner share to Canada was 18.00% and to Mexico was 15.94% (World Integrated Trade Solution, n.d.). These statistics indicate the heavy reliance of Mexican and Canadian exports on the US market. If NAFTA were to dissolve, Canada and Mexico would be impacted more significantly than the United States (Robinson and Thierfelder, 2018). Ultimately, after negotiations and compromises, the US, Mexico, and Canada signed the USMCA on November 30, 2018, as a replacement for NAFTA.

The USMCA is a hybrid deal, characterized by the USTR as a mutually beneficial win for North American workers and businesses. It includes the “modernization rules” required by the US Chamber of Commerce, particularly provisions on digital trade and intellectual property. It also incorporates the higher wages and stricter rules of origin demanded by the UAW, as well as the labor standards and “Buy American” requirements advocated by the AFL-CIO (see Table 3). It was indicated that the US employed coercive tactics during negotiations to secure more favorable trade terms from its trading partners (Kerr, 2020). The USMCA has resulted in an “asymmetrical exchange”, leading to unfair outcomes for the United States’ trading partners, particularly Mexico.

In fact, the United States’ increasing self-interest and disregard for other countries’ interests became evident during the Trump administration. This departure from the traditional practice of reciprocal trade and international cooperation strained relationships between the US and its trading partners. For example, Mexico and Canada retaliated against US tariffs on steel and aluminum. On June 8, 2018, Mexico announced tariffs on US agricultural products valued at $3.6 billion (US Department of Agriculture, 2018). Similarly, on July 1, Canada imposed tariffs on US products amounting to $12.8 billion, with roughly half of the targeted goods being steel and aluminum (Government of Canada, n.d.). Other countries, including the European Union, China, India, Russia, Turkey, and the United Kingdom, also responded by imposing retaliatory tariffs in 2018 (US Department of Commerce, n.d.). These actions have led to economic frictions between the US and the European Union, while rounds of import tariffs between the US and China eventually escalated into a trade war. By 2020, the favorable views of the United States reached a record low in nearly two decades among countries like the United Kingdom, France, Germany, Australia, Canada, and Japan (Wike, 2020).

4.2. IPEF: Attempting to promote a hybrid deal through reciprocity

The IPEF also faces the need to bridge the divergence among different domestic interest groups. On February 23, 2022, the US Chamber of Commerce expressed disappointment over the administration’s withdrawal from the TPP, and they criticized the IPEF for lacking precision, specificity, economic impact, and enforceability. They called for the inclusion of important provisions in the IPEF related to digital trade, customs administration and trade facilitation, good regulatory practices, anticorruption, intellectual property capacity building, technology standards, and other areas (US Chamber of Commerce, 2022). Conversely, groups such as the Asian Pacific American Labor Alliance, Communications Workers of America, and United Steelworkers expressed approval for the IPEF. In April 2023, 403 progressive advocacy groups sent a letter to Biden. They appreciated that the IPEF would not contain anti-worker provisions and would not undermine “buy America” and “buy local” policies, which have been common in previous trade agreements. They emphasized the importance of including robust labor rights commitments, facility-specific enforcement mechanisms, and requirements for signatory countries to reform their labor laws in the IPEF. They hope IPEF will enhance labor rights and labor enforcement (Stancil, 2023).

Actually, the US is actively promoting the IPEF as a hybrid deal, aiming to ensure a diverse range of interests and concerns from US workers, companies and other stakeholders (The White House, 2022). In May 2022, the United States, along with Australia, Brunei Darussalam, Fiji, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam, launched the IPEF. The IPEF has outlined four pillars: (a) The trade pillar aims to establish “high-standard, worker-centered commitments” in aspects of labor, environment and climate, digital economy, agriculture, transparency and good regulatory practices, competition policy and trade facilitation (USTR, 2022a). (b) The supply chain pillar aims to anticipate, withstand, or rapidly recover from shocks and enhance the competitiveness of the US economy in the Indo-Pacific region. (c) The clean economy pillar aims to tap into the vast market, promote investment, industrialization, and quality job opportunities in the clean energy transition across the Indo-Pacific region. (d) The fair economy pillar focuses on promoting a level playing field for businesses and workers by fighting corruption, curbing tax evasion, and enhancing transparency (USTR, 2022b).

In contrast to the enthusiastic response from the United States, most Indo-Pacific governments have expressed concerns or disappointment regarding the IPEF. The main issue is that the IPEF does not resemble a traditional free trade agreement. US Trade Representative Katherine Tai explicitly stated that it does not include market access, which is the primary concern for participating countries (The White House, 2022; Natalegawa and Poling, 2022). Essentially, the IPEF does not offer tangible benefits to US trade partners but instead requires them to adhere to higher labor, digital, and environmental standards, which may conflict with or surpass partners’ existing policies and necessitate difficult political decisions at home. Additionally, many partners feel that the expected commitments under the “tax and anti-corruption” pillar exceed what has already been agreed upon under international arrangements such as the United Nations Convention against Corruption (UNCAC). Therefore, Indo-Pacific countries, particularly the less-developed nations in South and Southeast Asia, perceive the IPEF as a US wish list with “many requests, few offers” (Goodman and Arasasingham, 2022).

To avoid backlash from trading partners, the IPEF was designed to be flexible, allowing partners to choose which pillars they want to participate in. However, the lack of attractive incentives inevitably hinders the progress of cooperation, particularly in the trade pillar. In May 2022, India announced its withdrawal from trade negotiations after the first round of ministerial talks on the IPEF. Indian Commerce and Industry Minister Piyush Goyal expressed concerns that the potential rules on the environment, labor, and digital trade within the trade pillar may have discriminatory effects on developing countries (Murphy, 2022). Indonesia, Malaysia, and Thailand have also emerged as leading critics of high labor and environmental standards (Rockwell, 2023). Additionally, compared with advanced economies such as Singapore, New Zealand, Korea, Australia, and Japan, many less-developed countries have expressed more concerns about the influence of Big Tech on cross-border data flows, data localization, and source code (Murphy, 2023). As of November 2023, the remaining member countries have also been unable to reach a substantive conclusion on the trade pillar as scheduled, and these negotiations are likely to continue to be stalled for the foreseeable future.

The Biden administration has made efforts to protect domestic industries affected by global competition without undermining a broader commitment to the overall system of open trade. This approach aims to strike a balance between safeguarding the interests of domestic groups and upholding the United States’ international reputation. However, these objectives can be inherently contradictory, making it challenging to achieve both simultaneously. As a result, the administration has chosen to approach trade policy cautiously, focusing on domestic industrial development and eschewing traditional trade agreements (Donnelly, 2023). However, differences of interests will not disappear through attitude avoidance. For instance, the US Inflation Reduction Act of 2022, which involves local content requirements and tax subsidies, has faced criticism from other countries for providing unfair advantages to American businesses and violating international trade rules. In response, the EU adjusted its State aid rules and implemented the Green Deal Industrial Plan (Scheinert, 2023). In conclusion, while Biden’s more flexible rhetoric has helped ease international dissatisfaction caused by the previous administration’s trade policies, it has not fully returned to the pre-Trump status quo. The United States no longer provides reciprocal benefits to its trading partners as it did before.

5. Conclusion

By establishing a comprehensive analytical framework, this paper reveals a dilemma faced by hegemonic powers, namely, maintaining global hegemonic interests while appeasing domestic conflicts is a challenging task. The paper identifies four distinct types of trade policies. Currently, the US trade policy is transitioning from type 2 to type 3 or type 4.

Since the 1980s, the United States has pursued a neoliberal policy that facilitated the global expansion of transnational capital through reciprocity (type 2). However, this approach has led to unequal benefits, with multinational corporations gaining at the expense of low-skilled domestic workers. As domestic conflicts intensified, the US trade policy shifted to a more aggressive unilateralist stance during the Trump administration (type 3). This was evident in the renegotiation of NAFTA, where Trump used threats of increased tariffs to pressure Mexico and Canada into accepting the USMCA. The USMCA includes provisions that protect the interests of transnational capital while also addressing the concerns of workers. While this model has caused dissatisfaction and resistance from the international community. Then the Biden administration is trying to promote a hybrid deal in a more reciprocal manner (type 4). However, the inherent conflicts make it challenging to fully realize this type of trade policy. The ongoing negotiations in the IPEF framework have incorporated major concerns raised by the US but have not addressed issues related to tariff reduction and market access that participating countries are most concerned about. The divergence of interests makes it difficult to achieve compromise and cooperation, resulting in slow progress in the negotiations within the IPEF framework.

The negotiation experiences of USMCA and IPEF demonstrate that the mode of US trade policy has shifted from reciprocal globalization deals to self-interested hybrid deals. The US has chosen to limit the interests of trading partners and appease domestic conflicts. The continuity of trade policy from the Trump to the Biden administration suggests that this shift is likely to become a norm in US trade policy. While this strategy may repair the domestic political foundation, it does not resolve the inherent conflicts between the international and domestic dimensions. It leads to new challenges at the international level, presenting obstacles to the long-term stability of the international economic order.

ORCID

Tian Li  https://orcid.org/0009-0003-2666-3400