Trade Archives - Progressive Policy Institute

2025 trade growth was the fastest since 2021

Posted on March 11, 2026March 11, 2026 by Alex Terr

FACT: 2025 trade growth was the fastest since 2021.

THE NUMBERS:

	2024	2026
Working satellites	~11,500	~18,000
Fiber-optic cables	561 cables	~637 cables
Container ships	30.4 million TEU	33.9 million TEU
Freighter planes	2,375	~2,675

WHAT THEY MEAN:

Two of the three big drivers of “economic integration” have faded or gone dark. The Trump administration’s tariff binge, even after the Supreme Court scrapped its “international emergency” decrees, leaves the world economy more “closed” than it was a year ago. Peace among big powers is growing steadily shakier. This ought to chill commerce — that was the path of the 1930s — but so far it hasn’t. In fact, the WTO’s calculations of “trade growth by volume” (essentially, though not exactly, an inflation-adjusted real-dollar count of export growth) put trade growth in 2025 faster than any year since the anomalous pandemic-recovery year 2021, and well above the last decade’s 3.0% average.

2025	3.60%
2024	2.90%
2023	-1.20%
2022	2.70%
2021	9.70%
2020	-5.30%
2019	0.10%
2018	3.00%
2017	4.70%
2016	1.70%

Why? In contrast to the 1930s, rising trade barriers aren’t a worldwide policy. Back then, lots of big economies followed the Hoover administration into high-tariff isolationism. In the 2020s, by contrast, most have kept policy stable, and many are continuing to integrate and ‘liberalize’. The European Union and South America’s “Mercosur” group (Argentina, Brazil, Paraguay, Uruguay) signed a Free Trade Agreement in January; the U.K. has joined the Comprehensive and Progressive Trans-Pacific Partnership; the African Continental Free Trade Area just got its 49th ratification, etc.

The U.S.’s large share of trade — 12.8% of goods & services imports, 9.8% of exports as of 2024 — means American policy choices should nonetheless affect total trade flows at least a bit. But that impact may be cushioned or entirely offset, though, by the strength of the third driver: the steady decline in communication and logistics costs as physical infrastructure improves.

Even over the last two years, it’s become noticeably cheaper and easier to move information and goods around the world. Some indicators:

Information carriers: Much of the world’s $8 trillion in services trade (setting aside personal travel and transport) moves in digital form, converted to information and then sent under the sea along a glass wire or through the sky via satellite beam.

Cables: Fiber-optic cables carry most information traffic, and therefore most services trade. Cable-tracker TeleGeography’s count of active cables has risen from 561 to a projected 637 this year, and newer cables are not only numerous but more powerful than their older siblings. As an example, last year’s “Bifrost” (oddly named for the “rainbow bridge” to heaven in Norse myth) is a 16,500-kilometer wire connecting Singapore to California, with branches in Oregon, Indonesia, and the Philippines. Bifrost can carry 32.5 terabits of data per second. By comparison, all of the 111 world cables in 2010 put together could carry about 239.5 terabits per second. A decade earlier, as fiber-optics replaced the older copper wires, the total world capacity was below 2 terabits per second.

Satellites: Satellites carry less information than cables but offer more options with fewer geographic dead spots, and are multiplying even faster than cables: Jonathan’s endearingly “2005 blogger-style web page” count of operating satellites, having risen from about 5,000 operating satellites in 2020 to 9,100 in early 2024, likely passed 15,000 this month. Liftoff schedules suggest the total may be near 20,000 when the next Congress takes office in January 2027.

Goods carriers: Luxuries and perishables, manufacturing inputs, metals, ores and energy, appliances and clothes, all move in ships, trucks, pipelines, and planes. About 45% of the $24 trillion in annual merchandise trade — measured by value rather than weight — travels by container ship, and 35% by plane.

Container ships: As of early 2026, container trackers at Alphaliner report 7,520 container ships steaming around the world’s oceans. Taken together, they can carry 33.9 million TEU worth of containers. (TEU: “twenty-foot equivalent units,” a standard measurement standing for a container 20 feet long, 8 feet high, and 8.5 feet wide.) The container fleet of 2024 had 6,464 ships with a capacity of 31.4 million TEU. For a more dramatic counterpoint, the entire worldwide container ship count in the year 2000 was 2,595 ships with 4.3 million TEU. So the last two years of yardwork have added nearly the equivalent of the whole millennial fleet. The Bipartisan Infrastructure Act of the Biden era, meanwhile, put $17 billion into U.S. seaports — more efficient terminals, better links to roads and railways, etc. — meaning that even in the U.S., cargo arrivals are incrementally getting faster and cheaper, offsetting some tariff increases.

Air freighters: The count of active large civil aircraft, meanwhile, has jumped from 28,400 to over 35,500, or by about a fifth. This isn’t simple to relate directly to air cargo flows, as some planes move only people, some just cargo, and many do both. But the count of planes strictly meant for cargo gives at least a sense of direction. Boeing’s 2020 Commercial Outlook estimated that by 2039, the world’s delivery services would be using 2,439 freighter planes. Their most recent edition says we’ve already arrived: by 2024, the cargo fleet employed 2,375 freighters — 920 at standard size, 800 medium widebodies, 655 large widebodies — and about 300 more took off in 2025 and 2026. Their new long-term projection is that the cargo fleet will reach 3,975 planes by 2044, up 70%, with the fastest growth in the largest planes.

In sum: So far, the world of the 2020s isn’t following the example set in the early 1930s. As the Trump administration is trying to make trade more expensive and difficult for Americans, other forces are trying to make it cheaper and easier. As to which will win out, from the U.S. angle, it seems to be a draw so far. From the world perspective (should the Trump program remain in place for a while), the apparent trend is for the administration to diminish parts of the American role in the global economy, rather than shrink the global economy itself.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

Read the full email and sign up for the Trade Fact of the Week.

Refunding illegally collected tariff money is not difficult

Posted on March 4, 2026March 4, 2026 by Alex Terr

FACT: Refunding illegally collected tariff money is not difficult.

THE NUMBERS:

Illegally collected “IEEPA”* tariffs:	~$175 billion
Annual IRS income tax withholding refunds:	~$330 billion

* “IEEPA” is an acronym for “International Emergency Economic Powers Act,” the 1977 law the administration used as the basis for eight tariff decrees in 2025. The other tariff decrees, “national security” claims under “Section 232” of U.S. trade law, haven’t been challenged so far and remain in force. The $175 billion is the estimated actual tariff collection under the IEEPA decrees, and does not include required interest payments.

WHAT THEY MEAN:

Brett Kavanaugh, one of three Supreme Court Justices to side with the Trump administration on “international emergency” tariffs two weeks ago, explains his view at least in part by saying he thinks repaying tariffs will be difficult:

“The United States may be required to refund billions of dollars to importers who paid the IEEPA* tariffs, even though some importers may have already passed on costs to consumers or others. As was acknowledged at oral argument, the refund process is likely to be a ‘mess.’ In addition, according to the Government, the IEEPA tariffs have helped facilitate trade deals worth trillions of dollars — including with foreign nations from China to the United Kingdom to Japan, and more. The Court’s decision could generate uncertainty regarding those trade arrangements.”

A general legal point on this, then a couple of comments on the practical issues:

Legal: If an administration puts an illegal policy in motion, and courts later find it illegal, unwinding it can be messy. That’s the nature of Justice Marshall’s “judicial review” concept. Any “mess” is the administration’s responsibility and its problem to fix, not the courts’.

Practical: Neither of Kavanaugh’s complaints is very daunting. The “deals” have basic problems — all of them raise costs for Americans — and don’t seem built to last anyway. And refunding the “IEEPA” tariffs needn’t be messy at all.

With respect to “deals” and “trade arrangements”, they aren’t worth “trillions” of dollars and don’t look like they’re meant to last long. As recently as January, for example, the administration itself was perfectly willing to abandon its “deals” with the European Union and the U.K. by threatening new tariffs over control of Greenland. And if it now places high value on them, it can eliminate any risk by asking Congress to pass implementing laws that bring them to life. Earlier administrations did this 18 times between 1974 and 2020 for GATT, WTO, and FTA agreements. If Congressional support is there, the deals will be fine. If not, maybe they aren’t very meaningful.

And with respect to refunding illegally collected tariff money, no “mess” unless the administration wants one.

There’s no blurriness about who is owed the money. In customs and tariff jargon, the people who write tariff checks to the Customs and Border Patrol are the ‘importers of record’, meaning about 242,000 importing companies in the U.S., 11,000 customs brokers handling trade paperwork for small businesses, and individuals now paying tariffs on arriving packages. CBP’s “ACE” (Automated Commercial Environment) system lets the firms and customs brokers enter their payments in digital form with an 8-digit tariff code identifying the product they’re buying, the date it arrived, its value, the applicable tariff laws and rates, and the amount of money they paid. Each of the administration’s eight “IEEPA” decrees created special tariff lines beginning with the HTS code 9903 to apply the new tariffs to incoming goods. As an example, the April 2 “global” decree created 52 new tariff lines, starting at “9903.01.25” and going up to “9903.01.76.” So CBP knows very well who has paid IEEPA tariffs on Ghanaian shea butter, Vietnamese-assembled TV sets, Valentine roses from Ecuador and Colombia, etc., and the payers likewise know how much of their tariff payments originated in an illegal IEEPA decree.

Nor should the government have any problem writing the checks. Tariff-payers can probably arrange most of the refunds themselves, using the ACE system to revise tariff filings dating back to April of 2025. (Tariff payments typically wait around at CBP for 315 days, then “liquidate” as CBP sends them to the Treasury’s General Fund.) For the earlier ones, a bit more complicated but the U.S. government regularly does much larger and more complicated refunds. To put some numbers on this:

CBP’s “Trade Statistics” snapshot says that in Fiscal Year 2025, CBP line officers handled 50.08 million separate import “entries” – container unloadings, truck crossings, air cargo deliveries, pipeline shipments, etc. — with tariff collection totaling $195 billion. IEEPA tariffs totaled about $93 billion in 2025, and were running at $16 billion per month in the first quarter of FY2026. Assuming that remained pretty stable in early 2026, the IEEPA revenue total is likely about $175 billion. With interest, the government owes $200 billion or so in refunds.
By comparison, the Internal Revenue Service got 163.4 million individual income tax filings last year, and sent out 104.9 million tax withholding refunds, valued at $329.1 billion. So, twice as many individual payments, and 50% more refund money than the tariff repayment will require. Six weeks from now, in mid-April, they will do this all over again without any particular trouble.

In sum: CBP will have to sort through a lot of forms. The Treasury Department will need to send out more checks than usual this year. But it won’t be a mess unless the administration decides to create one. And either way, that’s not the Court’s problem.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Read the full email and sign up for the Trade Fact of the Week.

Gresser in Politico Pro Morning Trade: USTR outlines goals for critical mineral pact

Posted on February 27, 2026 by Alex Terr

[…]

The two conflicting visions don’t add up, said Ed Gresser, a former USTR economist now at the Progressive Policy Institute, a Democratic think tank.

“I don’t think you can say in the State of the Union address that the economy is in really, really great shape and then also say we’re about to have a collapse in the dollar, mass unemployment, inability to service foreign debt, those sorts of things,” Gresser said.

[…]

Supreme Court: Presidents cannot use ‘international emergencies’ as pretexts to create their own tariff systems

Posted on February 25, 2026 by Alex Terr

FACT: Supreme Court: Presidents cannot use “international emergencies” as pretexts to create their own tariff systems.

THE NUMBERS: U.S. GDP growth, last five years–

2025    2.2%
2024    2.8%
2023    2.9%
2022    2.5%
2021    6.2%

WHAT THEY MEAN:

Having ordered his skeptical platoon to ford a flooding Louisiana river by moonlight, the obstinate, ill-fated captain in folksinger Pete Seeger’s Big Muddy insists that everything will be fine:

“It’ll be a little soggy, but just keep slogging. We’ll soon be on dry ground …”

It doesn’t work out quite that way.

The Supreme Court’s Learning Resources, Inc. v. Trump opinion, released Friday morning, offered the administration an easy way out. By striking down all of last year’s “International Emergency Economic Powers Act” (“IEEPA”) decrees, the Court gave the administration a chance either to (a) quietly liquidate an unpopular experiment, or (b) return to the Constitutionally appropriate approach of asking Congress to pass a tariff bill, as the like-minded Harding and Hoover administrations did in the 1920s. Within a few hours, it made a different choice: emotional denunciations of the court, a legal gamble on an antiquated law meant for a different purpose, and new tariff decrees oscillating up and down between 10% and 15%. As this thrashing around proceeds, a look at how the past year’s tariff binge played out, with Seeger’s piece as a wry optional soundtrack:

GDP growth slows: To start at the top, the administration’s central tariff decree — the now-defunct April 2 “Executive Order 14257” — predicted that tariffs would open a “new golden age.” In practice, the U.S. economy grew by 2.2% last year. This isn’t terrible for a “developed” economy, but is noticeably slower growth than in any of the four Biden years: 6.2% in 2021 during the pandemic rebound, then 2.5% in 2022, 2.9% in 2023, and 2.8% in 2024.

… and rural America crashes: Growth, of course, isn’t a single uniform figure across all regions and economic “sectors,” but the average of many different experiences. Rural America, the most export-reliant part of the U.S. — sales to foreign customers typically provide a fifth of farm income — has had a particularly bad time. Retaliations and consumer boycotts damaged farm export earnings last year — soybean sales to China down from $12.6 billion in 2024 to $3.1 billion, wine exports to Canada from $460 million to $103 million, etc. — while higher tariffs on fertilizer, agricultural machinery, fencing, tools, and other needs raised farm operating costs. With income down and expenses up, farm country is in bad enough shape for commodity-group and ag policy veterans to warn this month of a possible “widespread collapse of American agriculture and our rural communities.”

Trade balance unchanged: The administration justified its April 2 decree to the courts by declaring a “national emergency posed by a large and persistent trade deficit” (in goods specifically, excluding services trade), and claiming a big tariff increase would “address” it. It hasn’t. Last Thursday, a day before the Supreme Court’s verdict, Census Bureau statisticians published the U.S. trade data for 2025, which showed a somewhat higher goods-trade deficit in 2025 than in 2024:

	2024	2025
Imports of goods	$3.30 trillion	$3.44 trillion
Exports of goods	$2.08 trillion	$2.20 trillion
Goods trade balance	-$1.22 trillion	-$1.24 trillion

Manufacturing slowdown: The administration’s pitch to the public was more practical: higher tariffs would cause “some pain,” but would compensate by launching a manufacturing boom. That didn’t happen either. Employment growth slowed in general, and especially so in manufacturing: Bureau of Labor Statistics reports show manufacturing employment falling by 108,000 in 2025, mainly because manufacturers hired about 330,000 fewer new workers. Meanwhile, the Commerce Department’s Bureau of Economic Analysis calculates that the manufacturing share of U.S. GDP (based on the nine months of data available so far) contracted from 9.8% in 2024 to 9.4%.

Costs up: If tariffs haven’t produced growth, trade balance, or a manufacturing job surge, they have succeeded in raising costs. CBP appears to have collected a bit more than $260 billion in tariff money last year, more than triple the $76 billion of 2024. The biggest cost appears to have fallen on the automotive industry — over $40 billion on cars and parts, mostly under “national security” (technically, “Section 232”) tariffs that so far haven’t faced court challenge and thus remain in place. But the general tariff increase is seeping into daily life in unexpected and sometimes very personal ways. Some samples of where CBP got this money:

	2024	2025
Primary health products
OTC medicines	$0 million	$316 million
Band-Aids and other bandages	$0 million	$206 million
Condoms	$0 million	$7 million
Tampons	$23 million	$143 million
Crutches, splints, other fracture devices	$0 million	$197 million

Personal care & beauty	2024	2025
Soap	$31 million	$172 million
Makeup	$158 million	$724 million
Perfume	$11 million	$391 million
Hair care	$28 million	$140 million
Deodorant	$6 million	$17 million
Shaving cream, razors, & aftershave	$12 million	$63 million
Dental floss, toothbrushes, & toothpaste	$20 million	$100 million

Groceries	2024	2025
Fresh fruit and vegetables	$196 million	$1,175 million
Flowers	$8 million	$145 million
Coffee & tea	$6 million	$935 million
Honey	$4 million	$64 million
Pepper, cinnamon, ginger	$16 million	$128 million

Across the whole economy, the Harvard Business School’s tracking project estimates that tariffs raised the price of tariffed goods by 6.6% above trend, the price of similar locally produced goods by 3.8%, and overall prices by about 1%.

Federal debt up: As to federal finances, the Court’s ruling doesn’t mean the administration has to pay the whole $261 billion back, just most of it. The Congressionally authorized “MFN” tariff system is still active, though buried under much larger tariff decrees, and legally raises about $40 billion a year. The administration’s Section 232 “national security” decrees are often laughable — one defines condensed milk and balance beams as “steel or aluminum derivative products,” another says lumber tariffs will make sure we have the wood needed to build “ballistic missile defense systems” and “thermal protection systems for nuclear re-entry vehicles” — but so far haven’t faced legal challenge. But the “IEEPA” tariffs struck down on Friday account for about two-thirds of tariff revenue, roughly $175 billion, and the administration will have to pay it back with interest. That means the 2025 tariff experiment will likely end up a net loss to the Treasury.

In sum: slower growth, rural crisis, fewer manufacturing jobs, higher costs for families, and more debt for the government. The unfortunate captain in Seeger’s song tells his worried platoon to keep slogging as the water rises. But dry ground is nowhere in sight.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Read the full email and sign up for the Trade Fact of the Week.

PPI Applauds Supreme Court Decision to Strike Down Trump ‘Emergency’ Tariffs

Posted on February 20, 2026February 23, 2026 by Max Sherrill

WASHINGTON — Today, Ed Gresser, Vice President and Director for Trade and Global Markets at the Progressive Policy Institute (PPI), issued the following statement on the Supreme Court’s decision deeming President Trump’s IEEPA tariffs unconstitutional:

“A very conservative Supreme Court has done Mr. Trump a favor today, by giving him a chance to quietly liquidate about half of his tariff program. But it has only done part of the job, and Congress now needs to finish it.

“The public’s experience with Mr. Trump’s tariffs hasn’t been a happy one. In January, the administration promised lower prices and industrial growth. Since then, it has used tariffs to deliver higher costs of living to families, factory job loss and lost farm income to industry, and harm to America’s national security and international reputation. It is not a surprise to find such a program deeply unpopular, and the Trump administration should be grateful to the Court for partially scrapping it.

“Today’s decision, though, applies only to tariffs imposed through decrees using the International Emergency Economic Powers Act. The case did not cover the equally bad-faith ‘national security’ Executive Orders and Proclamations imposing tariffs of 10%, 25%, and 50% on furniture, whipped cream, lumber, gym equipment, metals, and thousands of other products through ‘Section 232’ of U.S. trade law. Barring a future legal challenge, these will remain in place, and so will a problem larger than price increases.

“Like the IEEPA tariffs, the ‘Section 232’ tariffs have no Congressional authorization. So beyond their real-world harm to families and businesses, they usurp Congress’s clear Constitutional authority over the rates of ‘taxes, duties, imposts, and excises,’ and substitute rule by personal decree for rule of law. As such, they represent the same breach of the separation of powers, and the same threat to the Constitution. Congress, in particular Speaker Mike Johnson and House Ways and Means Committee Chairman Jason Smith, must now complete the Court’s unfinished work through legislation to terminate the remaining tariff decrees and restore Constitutionally appropriate development of future policy.”

Founded in 1989, PPI is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Find an expert and learn more about PPI by visiting progressivepolicy.org. Follow us @PPI.

###

Media Contact: Ian O’Keefe – iokeefe@ppionline.org

U.S. manufacturing employment is down 108,000 in 2025

Posted on February 18, 2026February 18, 2026 by Alex Terr

FACT: U.S. manufacturing employment is down 108,000 in 2025

THE NUMBERS: U.S. pop-up toaster tariffs and employment–

	Tariff rate	Employment
2025	15.3% – ~80.0%	0 jobs
2024	5.3%	0 jobs

* Rates now include the 5.3% MFN tariff, plus a series of “emergency decree” rates including (i) a 10% worldwide tariff, (ii) country-by-country rates varying from 15% to 30%, (iii) frequently shifting tariffs on Chinese-made toasters, and (iv) a “national security” tariff of 50% on the value of any copper, steel, or aluminum parts and components. The (iv) part makes actual rates vary by model as well as country, and are hard even for CBP line officers to assess.

WHAT THEY MEAN:

Why did manufacturing employment turn down last year? An illustrative snapshot-in-miniature –

Then-Senator J.D. Vance in July of 2024: “We believe that a million cheap knockoff toasters aren’t worth the price of a single U.S. manufacturing job.” Putting an arithmetical gloss on this a few months later, DC-based tariff proponent Oren Cass used a hypothetical 10% tariff on Chinese-made toasters and a consequent price increase from $30 to $33 to argue that (a) higher tariffs would only modestly raise toaster prices, and (b) a large social and economic benefit would offset this extra cost:

“Damage is done when a consumer who would have benefited from a $30 toaster chooses not to buy one for $33. A second cost appears as consumers switch to domestic options that are more expensive. The consumer who buys the $32 toaster made in America pays the extra $2, but the government collects no extra revenue. Still, the share of the $32 purchase price that would once have gone to a Chinese factory and its workers now goes to an American firm and its workers instead. It pays American taxes and supports American families in American communities.”

Our own look in September had taken a different view. Setting aside the cost – across the full range of consumer spending on physical goods, the $2-per-toaster price increase would reduce average family purchasing power by about $2,000 – the claim that a 10% tariff would mean more U.S. toaster-manufacturing didn’t look realistic. At that time, no U.S. companies were making home pop-ups at all back then, though some were making large mass-production toasters for hotels and restaurants. The example of successful high-end pop-up makers in three peer countries — Dualit in the U.K., Italy’s Milantoast, and Japan’s Mitsubishi TO-ST1-T — suggested that a 10% tariff wouldn’t change that, and toaster prices would likely have to go somewhere around $300 before U.S. firms would go back to making pop-ups.

More fundamentally, the premise of a “10% tariff increase on toasters” wasn’t right, since what the Trump/Vance campaign was pitching at the time (and its administration successors have implemented since) was not a toaster or appliance-specific policy, but a general tariff increase also applying to the metals, heating elements, screws, plastic buttons, electrical wiring, etc., manufacturers need to make them. Our conclusion then:

“To get the spectacular ten-fold price-hike that sustains super-toaster making in Japan, Italy, and the UK, you’d need a 900% tariff or some equivalent policy. (Or, if you need only a five-fold price jump to make less impressive appliances profitable, 400%.) In fact, the additional Trump/Vance tariffs on metals, wiring, buttons, plastics, and other inputs would make U.S.-based toaster-making — including for currently successful producers like Holman Star — harder, not easier. The differentially higher tariff on Chinese-made pop-ups might push some into Vietnam or the Philippines, or possibly Mexico, but that would be the end of it.”

Sixteen months later, abstract arguments on hypothetical policies have been joined by real-world data and experience. Here’s what they say:

Policy: The 5.3% toaster tariff in the Congressionally authorized “MFN” tariff system (HTS 851672) still exists, but the Trump administration tariff decrees have put a sort of carousel of shifting rates on top of it. A rundown:

Three Feb. 1^st, 2025, decrees added 10% tariffs for Chinese-made toasters, plus 25% on hypothetical Mexican and Canadian alternatives. The Mexican and Canadian ones went away.
An April 2^nd decree created a new 10% worldwide rate for most goods, including all home appliances, plus country-by-country rates varying from 15% to 50%.

Note: At this point in early April, Howard Lutnick, the Commerce Secretary, predicted an “army of millions and millions” of Americans would be taking assembly-line jobs turning screws in appliance and consumer electronics factories.

An up-and-down set of U.S.-China tariff retaliations in April and May spiked the extra China-toaster tariff rate to 125%, then reduced it to 20%.
The July amendment to the April 2 decree set rates of 19% and 20% rates for Southeast Asian and Taiwanese toaster-producers.
The Commerce Department’s August 19^th decree, defining toasters as a “steel or aluminum derivative product,” put a 50% worldwide tariff on the value of steel and aluminum included in toasters. If you can’t figure out the metal value, it’s a flat 50%.

Extremely complicated, but the basics are a higher worldwide tariff and an especially high one on Chinese-made stuff. What’s happened since? At least so far, our mid-2024 guess at what the real-world impact might be looks extremely close to the real-life experience. Here’s the data:

1. Higher costs for families: A Cleveland Fed study of tariff impacts suggests that the various decrees have hiked the prices of tariffed goods by about 6.6%, and that the price of locally produced substitutes has gone up by about 3.8%. So, in Mr. Cass’s case of a toaster previously costing $30, the family will very likely pay $2 more.

2. Small toaster production shift: The spikes and volatility in China policy have encouraged some production shifts, with a few toaster-makers moving assembly from China to Malaysia last summer. By November, imports of toasters had dropped a bit, but China still accounted for 95% of toaster sourcing, with Malaysia at 4%. We were slightly off, having guessed at Vietnam and the Philippines as the likely beneficiaries. Not terrible guesses – the differential China tariff has pushed a lot of microwave and personal computer assembly to Vietnam, and the Philippines has picked up some vacuum cleaners – but Malaysia seems to have the toaster-making advantage.

3. No change in U.S. industry and manufacturing employment trending down: No U.S. firm is making pop-ups, so Mr. Vance’s hypothetical guy hasn’t found a toaster job. Nor, on a larger scale, has anyone enlisted in Mr. Lutnick’s ghostly screw-turning army. To the contrary, with higher tariffs on industrial inputs like the metals and wiring, fewer Americans are turning screws on production lines now than were a year ago. Per the Bureau of Labor Statistics, overall U.S. manufacturing employment dropped by 108,000 last year, with home appliance production shedding 2,600 jobs and consumer electronics shedding 800 more.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Read the full email and sign up for the Trade Fact of the Week.

Valentine’s Day boxed chocolate prices are up 11.8% this year 💝📈😡💔

Posted on February 11, 2026February 11, 2026 by Alex Terr

FACT: Valentine’s Day boxed chocolate prices are up 11.8% this year.

THE NUMBERS: Tariff increases on cacao and chocolate, Jan.-November 2025*

Total	$544 million
Cacao beans, paste, and cocoa butter	$313 million
Chocolates & cocoa powder	$231 million

*Most recent data available.

WHAT THEY MEAN:

Why does your V-Day box of assorted cremes, darks, truffles, and ganache cost so much? Partly it’s an unavoidable natural consequence of last year’s bad weather in West Africa, and partly it’s self-inflicted via tariffs. A look at the chocolate world — trees and farmers, shippers and chocolatiers, retailers and lovers — and the impact of eccentric and ill-judged policy:

Sources, Trade, and Production: Chocolate comes from the cacao tree, a shade-loving evergreen native to the Amazon. About 20 feet high when mature, the tree produces a few dozen green, red, or purple “pods” annually, each weighing about a half kilo and containing 20 to 50 beans. It’s not quite true to say that no chocolate originates in the United States — artisanal Hawaiian and Puerto Rican farmers produce about 100 tons of beans a year —but that’s a tiny fraction of the quarter-million tons American chocolatiers use annually. Most come from West Africa: Cote d’Ivoire grows nearly half of the world’s annual 5.6 million tons of cacao beans and neighboring Ghana adds 0.6 million more, with Ecuador third and Indonesia fourth.

Cacao farmers pluck the pods twice a year, then extract, ferment, and dry the beans to prepare them for sale. The New York Botanical Gardens explain:

“The fruits are cut from the tree and split open with machetes to extract the seeds surrounded by the white pulp. Next, the seeds are put into wooden boxes to ferment for usually three to six days. The fermentation causes the development of the characteristic aroma and flavor of chocolate, and in the breakdown of the white pulp surrounding the seeds. The beans are dried, either in the sun or in ovens, and the remaining pulp is removed.”

American chocolatiers are the world’s fourth-largest buyers (Europeans do more), purchasing 235,000 tons last year, with 82,000 tons from Cote d’Ivoire, another 84,000 tons from Ghana and Ecuador combined, and the rest divided among about 15 other producers around the world. Along with this came 311,000 tons of semi-processed cocoa paste and cocoa butter, with Côte d’Ivoire, Indonesia, Malaysia, and Ghana the main sources. All are duty-free under the normal, Congressionally authorized U.S. tariff system. Next step:

“In the chocolate factory, the beans are roasted to further enhance the flavor [ed. note: turning them from “cacao” into “cocoa” beans] and then the seed husk is broken and blown away in a process called winnowing, which leaves only pieces of the embryo called nibs. The nibs are ground into chocolate liquor, which is run through a hydraulic press to yield cocoa butter on one side and cocoa powder (which also contains some cocoa butter) on the other side of the press.”

The powder goes to drinks, and the “butter” (mixed in various degrees with milk, sugar, etc.) to confections. Compressing the whole tree-to-tongue supply chain, one or two pods go into a chocolate bar (roughly one pod for milk, and two for dark), and a 14-piece assortment needs about five pods. U.S. chocolatiers produce about 2.1 million tons annually, while grocers and retailers import another 755,000 tons, mainly from Canada and Europe.

Prices, Weather, and Tariffs: If this Saturday’s Valentine gift seems especially expensive, you’re not wrong. A Lending Tree study this month found that prices for boxed assortments have jumped by 11.8% on average since last February, and in some cases nearly doubled.

One reason for the spike is natural and unavoidable. Drought and unusual heat in West Africa last year meant trees produced fewer beans. This pushed prices up from $2,000 to $3,000 per ton of beans to above $10,000. The other reason is artificial and self-inflicted: the Trump administration’s April 2 tariff decree imposed 21% tariffs on Ivorian beans, 10% on Ghanaian beans, 32% on Indonesian beans, and 10% on beans from Ecuador. (Again, all were previously duty-free.) On top of this, they added 20% tariffs on European Union confectionery and 31% on Swiss confectionery. Rates have shifted around a lot — a July rewrite of the decree reset them at 15% for the West African and Ecuadoran beans, 19% on the Indonesian butter and paste, and 15% for European and Swiss confectionery — but have been raising costs all year long.

Altogether, from April to November the tariffs put over half a billion dollars’ worth of new expenses into the U.S.’ chocolate supply chain. Averaging by month, that’s an extra $25 million in tariffs on $250 million in cacao and chocolate imports. About three-fifths of the cost fell on U.S. chocolatiers buying beans, paste, and butter to turn into bars, truffles, and kisses. (And on their workers: BLS’s most recent data showed confectionery employment down by 3,500 jobs since January.) Grocers and retailers buying finished confections and powder paid the rest. The financials:

	2024	2025	Extra payments
Total	$71 million	$615 million	$544 million
Cacao beans	$0 million	$111 million	$111 million
Cocoa paste and butter	$0 million	$202 million	$202 million
Cocoa powder	$0.4 million	$59 million	$59 million
Chocolate confectionery	$71.million	$243 million	$172 million

The administration backed off on the beans, paste, and butter tariffs in mid-November, so Ghirardelli and Hershey got some year-end relief. But your Cadbury, Valrhona, Nestle or Lindt box still comes with 15% tacked on.

In sum, the tariff experiment has had some clear results — more costs for chocolatiers, fewer jobs for confectionery workers, and higher prices for couples. To the extent there’s a bright spot: the National Retail Federation’s V-Day forecast — spending up $1.4 billion this year — suggests that couples, if with some regret, have mostly decided to absorb the extra expense rather than scale back. If so, tariffs have imposed a clear cost, but lovers haven’t let it kill the mood.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

The U.S. public’s view of Trump tariffs was negative at the start. Few if any minds have changed since.

Posted on February 4, 2026 by Alex Terr

FACT: Most Americans disliked higher tariffs a year ago, and few minds have changed since.

THE NUMBERS: CNN/SSRS surveys on Trump tariffs –

	“Disapprove”	“Approve”
January 2026	62%	37%
July 2025	61%	39%
March 2025	61%	39%

CNN/SSRS surveys in March 2025, July 2025, and January 2026.

WHAT THEY MEAN:

Pollsters have been pestering Americans about trade and tariffs since the 1950s, but probably never as much as last year. Since the Trump administration’s first tariff decrees — last February 1, a year ago last Sunday — our probably incomplete count finds CNN/SSRS and Washington Post/ABC asking about tariffs three times each, the Pew Center twice, Fox News six times, NYT/Siena three times, the Wall Street Journal four, with Gallup, AP, the Economist and Reuters adding lots more. With their national data has come a gush of previously rare polling on tariff attitudes in individual states. The resulting mass of stats conveys a pretty simple message: Most Americans disliked higher tariffs a year ago, and few minds have changed since.

A summary with national averages, crosstabs, and states –

1. National: National polls suggest that (a) more than 60% of Americans disapprove of Mr. Trump’s tariffs, (b) a bit fewer than 40% support them, and (c) the most recent results look like the earliest ones. The CNN/SSRS figures above are pretty close to the overall average, but see below (“Further Reading”) to compare them with Washington Post/ABC, Fox News, and New York Times/Siena.

2. Crosstabs: Within this broad opposition, polling finds some consistent divisions of opinion. Three especially striking ones (and see “Further Reading” for two more):

Red v. Blue: Democrats nearly unanimously opposes, Republicans strongly but less enthusiastically support, and independents pretty decisively take the “blue” side. Fox News’ January survey, for example, reports opposition at 92%-8% among Democrats and 82%-18% among political independents, while Republicans approve by 71%-28%. At the state level, Bowling Green State’s October Ohio poll has an exceptionally sharp partisan split: within Ohioans’ overall 60%-40% disapproval, Democrats oppose the tariffs 97%-3%, and their independent neighbors oppose 83%-16%, while Republicans support 77%-23%.

Race & Ethnicity: African Americans are most opposed to tariffs, white Americans are most closely divided (though with anti-tariff majorities), and Hispanics are in between. For example, this January’s NYT/Siena poll (which seems to get the friendliest results for the administration) found white Americans opposing tariffs 51%-43%, African Americans 66%-25%, Hispanics 50%-29%, and “others” 63%-32%. Fox, meanwhile, had white Americans “disapproving” 61%-39%, African Americans 74%-26%, and Hispanics 67%-33%. Data on Asian American views is scarcer, but an AP poll last July showed Asian Americans and Pacific Islanders significantly more likely than Americans as a whole to believe tariffs would likely reduce job opportunities and raise prices, and the Pew Center’s April poll found 70%-28% Asian American “disapproval” of tariff increases. (We haven’t found a Native American survey, but try Native Voice One‘s in-depth radio discussion.)

Education: The education gap is a bit narrower, but socially illuminating. January’s NYT/Siena poll finds Americans with college degrees opposing tariffs by a very wide 65%-31% margin, and non-college Americans by a much narrower 48%-42%. The widest gulf is among white Americans: a 50%-43% plurality of non-college white respondents support the administration’s tariffs, while white Americans with college degrees oppose them by 63%-34%. NYT’s (very aggregated) “non-white” respondents are less sharply divided, with “non-college non-white” respondents opposing tariffs by 53%-30% and college degree holders by 72%-20%.

3. States: State polls add depth on regional opinion, and often ask distinctive questions that yield unexpected insights. Three examples (and more below):

New Hampshire: Relative importance of tariffs – The University of New Hampshire’s November poll provides a sense of the priority the public gives tariffs as an economic issue. Overall, 45% of their respondents approved of Mr. Trump’s economic management, while 54% disapproved. Among the “approving” minority, 27% cited tariffs as the most important reason for their good review. This was a higher share than any other issue got, and another 3% added “trade.” But an even larger 38% of the majority “disapprovers” cited tariffs as the most important factor in their opinion. So the New Hampshire public appears to agree that tariffs are very important, but on balance feels they’re important in a bad way.

Ohio: Tariff effects by economic class, business type, and unions – Bowling Green State University has polled Ohio twice, first in April and then in October. This went beyond broad approve/disapprove totals (60% disapproving and 40% approving in October, with 44% “strongly” disapproving and 18% “strongly” approving) to ask about the sort of people, institutions, and businesses who might benefit from tariffs. The answers suggest Ohioans developed an increasingly “un-populist” view of tariff impacts over the year. In April, 42% of respondents thought tariffs would help labor unions; by October, the share had fallen to 34. The share feeling tariffs might help small businesses likewise dropped from 41% to 35%, and those believing tariffs would help “the middle class” dropped from 42% to 36%. Meanwhile, the shares believing tariffs would benefit “the wealthy” and “large corporations” rose from 66% to 73% and from 60% to 67%

Texas: Levels of consensus on family finances, prices, and jobs – A December 2025 poll by the UT/Austin’s Texas Policy Project reports that 52% of respondents believe tariffs “will hurt my family,” while 20% think they will help, and 28% aren’t sure. Perceptions on price impacts were near-consensus: 67% believe tariffs are raising prices for “everyday goods,” while 9% think they’re lowering prices, and 25% weren’t sure. Guesses about job impact were most divided, with 42% feeling that tariffs mean fewer jobs for U.S. workers, while 29% predicted more jobs, and 29% didn’t know.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Read the full email and sign up for the Trade Fact of the Week.

The U.S. lost 20,000 scientific research jobs last year

Posted on January 28, 2026January 28, 2026 by Max Sherrill

FACT: The U.S. lost 20,000 scientific research jobs last year.

THE NUMBERS: Real-dollar growth in R&D spending, 2020-2023* –

World known	$400 billion
China	$173 billion
United States	$93 billion
Western Europe**	$55 billion
Japan/Korea/Taiwan	$55 billion
All other known***	$24 billion

* PPP basis, constant 2020 dollars. OECD Research and Development Indicators database
** 27 EU members, the United Kingdom, Switzerland, Norway, and Iceland.
*** Australia, New Zealand, Israel, Turkey, Costa Rica, Chile, Colombia, Argentina, Russia, Singapore, South Africa. OECD’s database does not include ASEAN members other than Singapore, the Middle East other than Israel, Africa other than South Africa, and Latin America/Caribbean apart from the four above.

WHAT THEY MEAN:

Headline from trade journal R&D World’s 2025 forecast:

“The question is no longer if China will surpass U.S. R&D spending, but what happens next. R&D World’s 2025 Global Funding Forecast projects China reaching effective parity with the U.S. this year ($1.05T versus $1.07T in PPP terms), with a full crossover expected by 2026.”

Background:

The post-COVID pandemic years were good ones for American science. Research investment stats take a few years to work out, but the National Science Foundation estimates that in 2023 Americans spent $923 billion on research and development — the world’s highest figure by about $100 billion, and up (without adjusting for inflation) from $730 billion in 2020. This was 3.45% of American GDP, tied with Japan for the world’s fifth-highest total and behind only Israel, Korea, Taiwan, and Sweden. Employment figures are more up-to-date, and show that from December 2020 to December 2024, America’s count of working scientists rose from 788,000 to 941,000 — over 150,000, raising the total by 20%. Altogether, Americans interested in mRNA vaccines, artificial intelligence, next-generation space telescopes, autonomous cars and planes, agricultural bee vectoring, etc., could feel proud of national accomplishment and excited about the future.

The U.S. isn’t alone, of course. The OECD tries to tally spending by country, and then to convert the yuan, euros, yen, won, pounds, etc., into dollar equivalents. Their count isn’t complete — it misses India, Brazil, and generally most large developing countries — but it probably gets most of the world’s science. They find R&D investment growing by about $400 billion from 2020 through 2023. Currency conversions and inflation adjustments mean you should read these figures more as approximations than precise comparisons, and likewise, “amount of money spent” isn’t identical to “actual scientific progress”. But they’re still pretty striking:

	2020	2023	Real-dollar Growth
World known	$2.4 trillion	$2.8 trillion	$400 billion
U.S.	$730 billion	$823 billion	$93 billion
China	$608 billion	$781 billion	$173 billion
Western Europe	$582 billion	$637 billion	$55 billion
Japan/Korea/Taiwan	$333 billion	$388 billion	$55 billion
All other known	$147 billion	$171 billion	$24 billion

OECD, constant PPP-basis 2020 dollars.

In sum, despite the U.S.’s pretty big push, China by itself accounted for nearly half of all world R&D growth. In the abstract, competition among leading economies to put more money into research and invent more new things — whether for national prestige, for wealth and economic growth, or a better understanding of nature and broadly shared human progress — can be a net good. The startlingly fast growth in Chinese R&D, in this sense, might be a spur for Americans to try harder. But in fact, something quite different is happening.

American private-sector research remains strong. The government’s contribution doesn’t. The Trump administration’s first year brought large-scale firing of government scientists, a shrinking total science workforce, and attempts to “institutionalize” this for the future. This began with chaotic purges of science-agency talent and research-contract cancellations during the “Department of Government Efficiency” debacle — the U.S. Geological Survey and the National Air and Space Administration staff cut by a fifth, the Centers for Disease Control by a third, the National Oceanic and Atmospheric Administration by a sixth; $2.6 billion in National Institutes of Health and $1.6 billion in National Science Foundation awards contracts canceled — and has been followed up with a more systematic attempt to disinvest from science.

Last September, the venerable American Association for the Advancement of Science reported that, altogether, the administration planned to cut federal R&D support from $197.5 billion in FY2025 to $154.0 billion in FY2026. Whether in percentages or total dollars, this would be the largest science budget cut ever — probably large enough all by itself, assuming Chinese growth has continued, to fulfil R&D World’s prediction and push the United States down into second place. Private-sector research can’t really compensate for this, as government programs weigh more toward basic research, which lacks immediate commercial return — space exploration in the 1960s, the invention of computer networks in the 1970s — but sometimes have very large long-term payoff. And in any case, the Bureau of Labor Statistics’ job tallies indicate that private-sector science may be following the government down. Its count of working scientists fell by 20,000 last year, the first net loss in a decade:

December 2025	921,000
December 2024	941,000
December 2023	934,000
December 2022	913,000
December 2021	860,000
December 2020	788,000
December 2015	672,000

OECD, constant PPP-basis 2020 dollars.

Different policies might bring some of them back. But looking further ahead, drastic slowdowns in legal immigration, presaged in this month’s decision to stop processing immigrant visas for 75 countries, would mean a structurally smaller American talent pool. The National Science Foundation reports that a quarter of American scientists, engineers, and lab techs were born abroad, including nearly 60% of the doctorate-level mathematicians, computer scientists, and engineers.

As they say, sometimes decline is a choice. But:

The Trump administration’s fecklessness doesn’t have to be “America’s choice.” At least in budgeting, the administration’s declining overall reputation appears to have emboldened Congress to reclaim its Constitutional role as the arbiter of spending. Without diving too deeply into arcane appropriations jargon — budget authority, outlays and obligation, FTEs, omnibus and minibus, etc. — Congress two weeks ago passed the “Commerce, Justice, and Science Appropriations” bill, which funds the National Science Foundation (NSF), National Aeronautics and Space Administration (NASA), and the National Oceanic and Atmospheric Administration (NOAA. This restored nearly all the science investment Mr. Trump’s clan wanted to cut, and bars agencies from moving money from science to non-science offices. AAAS’s current tally foresees a cut of 3.6%, as against the nearly 25% it foresaw last summer. A pretty big step, though the bills funding the two agencies that comprise about 77% of all of the federal government’s RD funding — the Department of Defense and the badly wounded Department of Health and Human Services — aren’t yet done. Good start. Lots more to fix.

Read the full email and sign up for the Trade Fact of the Week.

The U.S. has no claim to Greenland

Posted on January 21, 2026 by Max Sherrill

FACT: The U.S. has no claim to Greenland.

THE NUMBERS: Trump tariff threats last week –

10% tariffs on goods from Denmark, Finland, France, Germany, the Netherlands, Sweden, Norway, and the U.K., rising to 25% by summer.

WHAT THEY MEAN:

Over the weekend, Mr. Trump threatened to impose tariffs of 10% on February 1, rising to 25% by summer, on goods from eight historic allies — Denmark, Norway, Sweden, Finland, France, the Netherlands, and the United Kingdom — over their unwillingness to support his strange ambition to acquire Greenland. So far, the White House has published no actual decree or other document giving this threat any force, and — as with last October’s threat for a similar 10% tariff on Canadian goods, meant to retaliate for an Ontario government advertisement quoting the late President Reagan on tariffs — perhaps it will simply go away.

That autumn threat, however, has done lasting harm: after a year of Mr. Trump’s provocations, the Canadian government has felt forced to make auto-trade and other arrangements with China to diminish the effect of any U.S. tariff on Canadian goods. The harm done by last week’s threat against America’s European friends will likewise escalate over time until it is reversed.

With this in mind, three points: the U.S. has no legal, historic, or other claim to Greenland; the administration’s effort to make such a claim is corroding American security; and Congress should repeal any tariffs on these countries immediately, and then reform trade law more generally to halt tariff innovation by decree and restore Constitutionally appropriate policymaking. More –

1. Greenland: Greenland is an autonomous country, constitutionally one of three realms of the Danish monarchy, with an elected government that sets its own policies. It is a NATO ally, with a large U.S. military base and an open economy. The governments of both Greenland and Denmark worked closely with the U.S. for eight decades on Arctic security (and often have been advocates of larger Arctic defense commitments than U.S. administrations have been willing to make), resource mining, and any other actual policy concerns, and remain willing to do so. Both have also made clear that sovereignty is not negotiable: neither Danes nor Greenlanders are interested, any more than Americans would be interested in selling off chunks of U.S. land and people to other countries. There is no Greenland “issue.”

2. Security: U.S. military alliance with the world’s advanced democracies — Western Europe, Canada, Japan, Korea, Australia — has been the foundation of American national security and world peace since the Second World War. It needs to remain so. Denmark specifically, as PPI’s Ed Gresser observed last year, is a four-generation ally and good neighbor, which committed 21,000 soldiers to the U.S.’s call for help in Afghanistan and Iraq and lost 50. National Security Director Peter Juul noted last week that threats and abuse against allies and good neighbors — that is, adventures which put this foundation of security at risk — are madness, and adds some time-to-break-the-glass ideas on ways Congress can usefully respond.

3. Tariffs: Congress has Constitutional authority over “Taxes, Duties, Imposts, and Excises,” and needs to use it now. Mr. Trump has shown, repeatedly, over the past year, that he cannot responsibly manage any delegated tariff powers. Congress, and in particular Rep. Jason Smith and House Speaker Mike Johnson, need to remove his temptation to use them. This requires laws to (a) cancel any tariffs on Americans buying Danish or other European goods, and (b) require Congressional approval of any future tariffs imposed under trade laws including the International Emergency Economic Powers Act (“IEEPA”, the basis for most of last year’s tariff decrees, presumably meant by Congress to help address rather than try to create emergencies); the various “Sections” of trade law 232, 301, 122, and 338; and (c) likewise require Congressional approval for entering, or leaving, trade agreements with tariff components.

Such bills already exist. With leadership from Sens. Ron Wyden and Rand Paul last October, the Senate has already voted to terminate Mr. Trump’s IEEPA tariff decrees. The House bill introduced last spring by Trade Subcommittee Ranking Member Linda Sanchez and the other Ways and Means Committee Democrats, HR 2888, would cancel all of Mr. Trump’s “emergency” and “national security” tariffs and require Congressional approval of any new ones. Now would be a good time for them.

Last point: As we — again — noted last year, the world is full of complex challenges, painful choices among lesser evils, and chronic problems with no obvious solution. The status of Greenland isn’t one of them. To the extent there is any problem, it is quite new and has an obvious and easy solution: the Trump administration should stop causing it.

Read the full email and sign up for the Trade Fact of the Week.

Venezuela oil production is down 75% since 1998

Posted on January 14, 2026 by Alex Terr

FACT: Venezuela oil production is down 75% since 1998.

THE NUMBERS: Venezuelan GDP (constant 2015 dollars*) –

2024	$42.6 billion
1998	$94.1 billion

* World Bank

WHAT THEY MEAN:

Assessing last week’s raid on Venezuela and the arrest of Chavista chief Nicolas Maduro, PPI’s National Security Director Peter Juul expects little good to come:

“Now-former Venezuelan President Nicolas Maduro was a brutal dictator whose dreadful politics and policies, largely inherited from his equally autocratic predecessor Hugo Chavez, ran his country into the ground. The U.S. military operation that captured Maduro once again demonstrated the tactical and operational proficiency of the American armed forces. But neither Maduro’s autocratic governance nor the audacity and skill of the U.S. military in executing assigned tasks are the primary issue at hand here: at the whim of one man and with no real explanation or apparent rationale, the United States has launched an unwise and illegitimate military intervention that only undermines American interests and international security.”

What might be next? Trump administration comments and actions suggest three things. First, the admin. expects to “run” Venezuela for some time to come. Second, its apparent plan is to leave Maduro’s “Chavista” subordinates in place and hope they will cooperate with American managers. And third, U.S. and international energy companies will rebuild Venezuela’s oil industry as the basis for the national economy. Some oil data, then a couple of observations on the challenges a plan like this will face:

Venezuela sits on top of a large pool of petroleum. The U.S. Energy Information Administration and OPEC both cite a figure of 303 billion barrels of “proven reserves” of crude oil. This would be the world’s largest reserve, with Saudi Arabia second at 267 billion barrels and Iran third at 209 billion. (The U.S. has about 45 billion.) The two sources diverge a bit on the worldwide reserve total — EIA guesses 1.80 trillion barrels, OPEC 1.57 trillion — but either way, a 300-billion-barrel figure for Venezuela would be a sixth or maybe even a fifth of the world’s currently recoverable crude oil.

A lot of oil, then. But so far it hasn’t done Venezuelans much good – rather the reverse. Maria Corina Machado’s Nobel Peace Prize address last December explains:

“The concentration of oil revenues in the State created perverse incentives: it gave the government immense power over society which turned into privilege, patronage, and corruption. … Oil wealth was not used to uplift, but to bind. Washing machines and refrigerators were handed out on national television to families living on dirt floors, not as progress but as spectacle. Apartments meant for social housing were handed to a select few as conditional rewards for obedience. And then came the ruin: Obscene corruption; historic looting. During the regime’s rule, Venezuela received more oil revenue than in the previous century combined. And it was all stolen. Oil money became a tool to purchase loyalty abroad while at home criminal and international terrorist groups fused themselves to the state. The economy collapsed by 80%. Poverty surpassed 86%. Nine million Venezuelans were forced to flee.”

And looking ahead from this point of inflection, there are some good reasons to believe a rebuilding plan centered on energy income isn’t likely to work: challenging at best for objective reasons, relying on partners who probably aren’t very reliable, and maybe the wrong strategic direction in general.

(1) Objective problems: The Chavista governments may have exaggerated the “300 billion barrels” figure for political reasons, so it should be thought of as a “theoretical maximum” rather than a firm number. And whatever the actual reserve level, Venezuela’s oil is pretty low quality — “heavy” and “sour” as opposed to the “light” and “sweet” refiners usually prefer. (“Heavy” meaning dense, carrying lots of asphalt and tar, harder to pump and transport; “sour” shorthand for high sulfur and sometimes metal content, thus needing more processing to reduce pollutants.)

(2) Likely unreliable partners: The 26 years of “Chavismo” featured regular large diversions of money from the state oil company PdVSA to regime loyalists and overseas clients, firings of skilled but politically independent-minded staff, and decaying infrastructure. So despite large reserves, the machines and wells needed to bring oil out of the ground and to ports are in bad shape. Venezuela’s real-world production is only about 1% of the world total: 810,000 barrels produced per day, down about 75% from 2.7 million barrels in 2014 and 3.1 million in 1998, and a bit less than 1% of the world’s 102.5 million-barrel daily output. Put bluntly, the administration seems to be relying on the people responsible for this to fix it.

(3) Probably the wrong strategy anyway: Venezuela is too reliant on oil. The WTO’s World Trade Profiles reports that oil exports — even in PdVSA’s current decrepit state — accounting for 75% of Venezuela’s $5 billion in exports. For a regional index, energy makes up 50% of Colombia’s $75 billion in total exports, 39% of Ecuador’s $33 billion, and 28% of Trinidad’s $13 billion. Ms. Machado’s comments on Venezuela’s experience are an extreme case of a general problem: developing countries solely reliant on resource exports risk concentration of power and wealth, internal corruption, and economic “Dutch disease” in which oil revenue inflates currency values and perversely shrinks the more labor-intensive agriculture and manufacturing sectors.

So a plan based on reviving large-scale Venezuelan energy exports, if it works, will be expensive and slow. Relying on the Chavista officials who crippled it over the past quarter-century to fix it now, rather than experts overseen by democratic politicians, makes such a plan likely to fail. And even if it succeeds to some extent, that might make the logical larger goal — a pluralistic economy and society, a democratic political system, cooperative relationships with South American and Caribbean neighbors — harder to achieve. Juul’s skepticism has a pretty strong foundation.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Read the full email and sign up for the Trade Fact of the Week.

The Trump administration is not protecting freedom of speech

Posted on January 7, 2026 by Alex Terr

FACT: The Trump administration is not protecting freedom of speech.

THE NUMBERS: Some people denied U.S. visas –

People	Year
Thierry Breton,Anna-Lena von Hollenberg, Josephine Ballon, Clare Melford, Imran Ahmed	December 2025
Wole Soyinka	October 2025
Patricia Lara	1986
Dario Fo	1980
John Lennon	1972
Gabriel Garcia Marquez	1971
Miriam Makeba	1968
Carlos Fuentes	1962
Charles Chaplin	1950
Pablo Neruda	1946

WHAT THEY MEAN:

Thomas Jefferson’s Second Inaugural calls for confidence in truth, the weakness of error and deceit, and the public’s capacity to reason — given freedom of speech — from facts informed by principles to a correct judgment:

“Since truth and reason have maintained their ground against false opinions in league with false facts … the public judgment will correct false reasonings and opinions on a full hearing of all parties.”

In this age of troll farms, programmed bots, “influencers” subsidized by unfriendly powers, and other disinformation ops, sticking with Jefferson’s idealism takes nerve. The Trump administration hasn’t got it: Over the holidays, its State Department banned five citizens of U.S. allies — a former EU Commissioner and four digital-monitor NGO officers — from entering the United States, based essentially on claims that they talk too much and say unwelcome things. A rundown, then some thoughts:

France: Thierry Breton, the former EU Commissioner for the Internal Market, because in 2024 he “ominously reminded [Twitter owner] Elon Musk of @X’s legal obligations” under the European Union’s Digital Services Act.

United Kingdom: Clare Melford of Global Disinformation Index, apparently for involvement in Canadian controversies over Native American residential schools. Imran Ahmed of the Center for Countering Digital Hate gets a flag too, as a “key collaborator with the Biden administration’s effort [ed. note: non-existent] to weaponize the government against U.S. citizens,” for example, by publishing a list of 12 prominent anti-vaccine sites and their leaders, one of whom now has a Trump admin. job.

Germany: Anna-Lena von Hollenberg and Josephine Ballon of HateAid, a “digital watchdog” NGO based in Berlin, both of whom “cited threat of ‘disinformation’ from ‘right-wing extremists online’” and “support the U.K.’s Online Safety Act and EU’s Digital Services Act.”

In sum: An ex-EU official reminds a company of legal obligations (even if the law in question, in the PPI view, isn’t a very good one); an NGO works in good faith with a U.S. administration to identify and publicize disinformation ops; another lists anti-vaxx groups; a third gets involved in intra-Canadian disputes. The Department says that these (a) amount to an effort to “coerce U.S. platforms to censor, demonetize, and suppress American viewpoints”, and that (b) the five individuals’ “entry, presence, or activities in the United States” therefore “have potentially serious adverse foreign policy consequences [ed. note: none specified] for the United States,” (c) making the visa bans a way to “combat” a “global censorship-industrial complex.”

What to say about this? The Trump administration isn’t in general much of a free-speech defender. At home, the White House, the Federal Communications Commission, the Departments of Justice, Education, Defense, etc., and other agencies all frequently threaten to withdraw U.S. media companies’ broadcast licenses for unfavorable press coverage, accuse Members of Congress of “sedition” for the obviously correct statement that American soldiers must refuse illegal orders, sue overseas journalists, try to micro-manage university curricula, etc. Looking abroad, December’s visa decisions are more in a series of decisions meant to show petulance and hostility toward America’s European allies, but the Europeans aren’t the only targets. A few weeks earlier in October, the administration reanimated a particularly unfortunate Cold War policy — keeping artists and writers with inconvenient or objectionable opinions out of the U.S. — by canceling the visa of 91-year-old Nigerian Nobelist Wole Soyinka, apparently to express resentment for Soyinka’s unflattering comparison of Mr. Trump to the late Ugandan president Idi Amin.

None of this, of course, means that NGO critiques of U.S. platforms are always right, nor that the administration is invariably wrong. But the U.S. and the European democracies are certainly targets of disinformation campaigns. Governments ought to be cooperating to expose and counter them, and it’s good that British and German NGOs are trying – very much in Jefferson’s spirit of trying to provide the public a “full hearing” – to identify and publicize their origins and objectives. They sometimes do miss, and they may at times wrongly blame ‘platforms’ for larger policy problems. But the appropriate response is to provide accurate facts and let the public decide, not try to stop Americans from hearing them. And as to “serious adverse foreign policy consequences,” that looks like just blather. The administration’s real complaint seems to be about the expression of opinions and factual points that it, or some of its friends, dislikes hearing. In any such case, Jefferson remains the right guide.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Read the full email and sign up for the Trade Fact of the Week.

Tariff bill on toys and Christmas ornaments up 300-fold this year

Posted on December 16, 2025December 16, 2025 by Alex Terr

FACT: Tariff bill on toys and Christmas ornaments are up 300-fold this year, from $7 million to $2 billion.

THE NUMBERS: U.S. tariff collection, January-September* –

Product	2024	2025
Toys and dolls	$0 million	$1,509 million
Video game consoles	$0 million	$448 million
Christmas ornaments	$7 million	$446 million
Other Christmas decorations	$0 million	$66 million
Nativity scenes	$0 million	$8 million
Sports equipment	$309 million	$993 million
Musical instruments	$62 million	$144 million
Cards and magic tricks	$0 million	$38 million

* Most recent data available. About a third of toy imports arrive in October, November, and December, so the final 2025 totals will likely approach $2 billion for toys, $0.7 billion for ornaments, Nativity scenes, and other decorations, and $0.7 billion for video game consoles and accessories.

WHAT THEY MEAN:

Having squeezed down the chimney, the Grinch pokes his head out of the fireplace and looks around:

“‘These stockings,’ he grinned, ‘are the first things to go!’
Then he slithered and slunk, with a smile most unpleasant,
Around the whole room, and he took every present!
Pop guns! And bicycles! Roller skates! Drums!
Checkerboards! Tricycles! Popcorn! And plums!
And he stuffed them in bags. Then the Grinch, very nimbly,
Stuffed all the bags, one by one, up the chimney!”

Then he takes all the food in the house and steals Cindy Lou’s tree.

The Trump administration’s comparably weird idea for a de facto two-doll-per-girl rationing system hasn’t entirely panned out. It hasn’t wholly failed, though. With tariffs higher and prices rising, Americans are spending less on Christmas gifts this year than last, and getting less for the money they do spend.

The National Retail Federation’s mid-October estimate notes that “tariffs remain on top of mind for most holiday shoppers, with 85% anticipating higher prices because of tariffs”. They predicted that the average American household would spend $890 on holiday gifts this winter, which would be a $12 drop from 2024’s $902, and adjusting for this year’s higher prices, a real-dollar drop of about 3%, to $863. Coincidentally or not, as PPI’s Fiscal Policy Analyst Alex Kilander points out this week, the 3% real-spending drop almost perfectly matches the BLS’s Consumer Price Index estimate of a 3% rise in toy prices this year.

NRF’s 85% aren’t wrong to worry. Census figures on tariffs are complete only through September, so they haven’t yet tallied the bill for holiday-season shipments in October and November. But even the January-to-September figures already show a hike in the toy-tariff bill from nothing in 2024 to $1.5 billion this year. Video-game consoles got a similar $0 to $448 million hike. Tariff collection jumped 80-fold on Christmas tree ornaments and other decorations — $7 million last year, more than half a billion dollars this year — and rose by $8 million even on creches and Nativity scenes.

In effect, rather than swiping the presents and throwing them off a mountain, the Trump team is heavily taxing them. (U.S. Supreme Court, 1819: “The power to tax involves the power to destroy”.) We can’t precisely line up the administration’s tariff bill with the Grinch’s raid on Whoville, because the Harmonized Tariff Schedule metaphorically stuffs all toys, dolls, tricycles, balloons, and so forth into a single bag (HTS line 95030000). But we can do a pretty close match, starting in the same way with the stockings:

PRODUCT	2024 TARIFFS	2025 TARIFFS
Socks & other hosiery	$225 million	$441 million
Toys, dolls, etc	$0 million	$1,509 million
Bicycles	$109 million	$159 million
Roller skates	$0 million	$5 million
Drums	$4 million	$7 million
Board games	$0 million	$59 million
Popcorn	$0.01 million	$0.2 million
Plums (fresh)	$0 million	$0.5 million
Plums (preserved/sugared)	$0.4 million	$0.6 million

So buyers of children’s gifts like tricycles and popguns (both in the toy group, along with the dolls) have taken a big financial hit. Bicyclists and gamers — traditionalist board aficionados and video and digital enthusiasts alike — only slightly less. The tariff impact on drums and roller skates is a bit less dramatic, in the seven-digit “millions” of dollars rather than the nine-digit “hundreds of millions.” Popcorn mostly comes from U.S.-grown corn and doesn’t attract many tariffs. Imported plums (mainly from South America) usually arrive between January and April, so most of the 2025 shipments got through Customs before the tariff decrees hit. As to your tree, no data yet. The administration’s lumber-tariff decree only went live at the end of September, so we don’t yet know how big the extra bill will be.

The Whos, of course, make the best of an unfortunate situation and go out for their sunrise caroling anyway. American parents, couples, and friends next week will probably do likewise. But it shouldn’t have to be this way. Congress has all the power it needs to put a stop to this sort of thing, if it wants to, before the 2026 holidays.

Special note: PPI trade staff will be on holiday through the New Year. Our Trade Fact service will accordingly take a two-week break and resume on January 7. We wish PPI’s friends and readers, at home and abroad, a peaceful and happy holiday season

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Read the full email and sign up for the Trade Fact of the Week.

Worldwide HIV/AIDS mortality down 80% since PEPFAR launch

Posted on December 10, 2025 by Alex Terr

FACT: Worldwide HIV/AIDS mortality down 80% since PEPFAR launch.

THE NUMBERS: Eswatini life expectancy at birth –

2023	64
2022	63
2020	60
2015	55
2010	48
2005	44
1989	62

WHAT THEY MEAN:

On this year’s World AIDS Day: The principal U.S. support program — the “President’s Emergency Plan for AIDS Relief,” or PEPFAR, for short — is a success story with an uncertain future. As a point of entry, here’s one of the countries the HIV/AIDS pandemic hit hardest:

Eswatini is a small inland kingdom of 1.3 million people bordering South Africa and Mozambique. Its HIV-positive rate, 23.4% of adults, is the world’s highest. In the early 2000s, Swazi health officers were counting 11,000 AIDS deaths a year — one in every hundred people – and reported a drop in life expectancy at birth from 62 years to 42. A grim point of comparison suggests how extreme that is: Chinese life expectancy at birth appears to have fallen by 1.5 years during World War II, and by six months during the Great Leap Forward/Cultural Revolution decade from 1959 to 1969.

Pulling back: In the early 2000s, about 40 million people were HIV-positive — 2 million in the United States and other “developed” countries, 25 million in sub-Saharan Africa, 7 million in South and Southeast Asia, 2.1 million in Latin America and the Caribbean, 4 million elsewhere around the world. Over 3 million died annually. UNAIDS’ 2005 report is a reminder:

“Acquired Immunodeficiency Syndrome (AIDS) has killed more than 25 million people since it was first recognized in 1981, making it one of the most destructive epidemics in recorded history. Despite recent, improved access to antiretroviral treatment and care in many regions of the world, the AIDS epidemic claimed 3.1 million [2.8–3.6 million] lives in 2005; more than half a million (570 000) were children. The total number of people living with the human immunodeficiency virus (HIV) reached its highest level: an estimated 40.3 million [36.7–45.3 million] people are now living with HIV. Close to 5 million people were newly infected with the virus in 2005.”

Governments and charities attempting to respond in lower-income countries were trying to manage multiple large challenges, each of which made all the others harder to solve:

Low patient awareness. Most HIV-positive adults in developing countries were untested and unaware of their status.
Medicine scarcity: Antiretroviral triple-drug therapy was launched only in the late 1990s, and availability worldwide was very limited.
Difficulty delivering care when patients were aware and medicines available: Millions of potential patients lived in rural areas and large city slums with few clinics and fewer trained nurses and doctors.
Finance: Most developing-country health ministries are small and lack the money to meet any one of these practical challenges, let alone all of them at once.

PEPFAR, which the second Bush administration launched in 2003, and the following administrations continued through 2024, has been the U.S.’s big response. Its various national accounts — prevention and education, testing, medicine, orphan and dependent care — and contributions to the Global Fund and UNAIDS combined for just under $7 billion per year during the Biden administration. This was about a third of the world’s $22 billion in total HIV/AIDS support. Taken as a whole, it aimed to support education, make testing widely available, provide large volumes of medicine, and train staff in delivery and care. Run by seven agencies headed by the Global AIDS Coordinator at the State Department, but mainly administered by professional staff and contractors at USAID and the Centers for Disease Control, PEPFAR programs were operating in 120 countries this past January, providing anti-retroviral medicines to 20.1 million people, care and shelter for 7 million orphans, and “PrEP” preventative treatment for 1.5 million people.

Since the launch, treatment has spread to reach nearly 32 million of the 41 million people now believed HIV-positive worldwide. Annual new infection estimates have dropped from 3.4 million to about 1.3 million a year. And mortality is down from the 3 million annual deaths of the early 2000s to about 630,000 per year now. In sum, over its two decades, PEPFAR has earned a plausible claim to the mantle of the postwar Marshall Plan: an ambitious concept on a global scale, efficient practical implementation, and commitment to the common good.

This year, the Trump administration shut down the main PEPFAR administrator, the U.S. Agency for International Development. According to the U.S. government’s aid tallies, American support for global health aid fell from $13.2 billion in FY 2024 to $4.7 billion in 2025. The administration did, though, promise to preserve PEPFAR by shifting program management to the State Department. This has, in fact, happened, though with lots of transitional damage — fired contractors, lost human talent, interrupted care — over the spring and summer, with consequences such as loss of PrEP access for 2.5 million people worldwide, closed clinics in Zimbabwe, and doubling counts of secondary mpox infections in Kenya. Taking into account the much larger drop in U.S. support for health and humanitarian relief, the Gates Foundation predicts a rise in childhood deaths of about 200,000 in 2025. Looking to 2026, the administration’s September strangely titled “America First Global Health Strategy” proposes to continue PEPFAR programs but cut U.S. government spending on them by about $1.7 billion, while asking beneficiary countries to contribute more to close the resulting gaps.

Returning to Eswatini, where U.S. health support has dropped from $75 million in 2024 to $19 million this year: The pandemic is far from over. But measured both by health policy criteria and by real-world results, as of 2024, Eswatini was meeting its main challenges. A 2023 national survey showed 94% of adults with HIV were aware of their status; 97% of them were using antiretroviral medicines, and virus suppression was achieved in 96% of antiretroviral patients. More generally, (a) HIV-positivity rates have dropped from the 29.4% peak in the mid-2010s to this year’s 23.4%; (b) 213,000 Swazi were taking antiretrovirals, as against 500 in 2005; (c) 20,000 are testing each month; (d) AIDS mortality has dropped by 75%, from the 11,000 deaths per year of the early 2000s to 2,600 last year; and (e) national life expectancy in 2023 for the first time exceeded pre-HIV pandemic rates and continues to rise. And two weeks ago, residual PEPFAR money helped add a new treatment — lenacapavir, a twice-yearly injection medicine — to Eswatini’s health program.

On this World AIDS Day, the President’s Emergency Plan for AIDS Relief has accomplished an astonishing amount of good in its first two decades. PEPFAR authors and the U.S. aid staff who ran the programs should take great pride in their contribution to this 80% drop in mortality. It isn’t finished, and 630,000 deaths is still a very large number. Congress shouldn’t let it stop before it’s done.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Read the full email and sign up for the Trade Fact of the Week.

Foreign exchange trading in rubles is down by 96%

Posted on December 3, 2025December 3, 2025 by Alex Terr

FACT: Foreign exchange trading in rubles is down by 96%.

THE NUMBERS: Daily currency exchange* —

	2019	2025	Change
All currencies	$6.58 trillion	$9.60 trillion	+45%
Dollar	$5.81 trillion	$8.56 trillion	+47%
Euro	$2.13 trillion	$2.77 trillion	+30%
Yen	$1.11 trillion	$1.61 trillion	+45%
Renminbi	$0.29 trillion	$0.82 trillion	+187%
Pound	$0.84 trillion	$0.98 trillion	+16%
Ruble	$0.07 trillion	$0.003 trillion	-96%

* Bank of International Settlements 2025 Triennial Central Bank Survey of Foreign Exchange

WHAT THEY MEAN:

Every three years, the Bank of International Settlements in Basel guesses at how much money currency traders – government ministries and central banks, firms buying and selling across borders, tourists, computerized hedge-fund trading programs — exchange in a day. Their 2025 “Triennial Central Bank Survey of Foreign Exchange,” out in September, reports $9.6 trillion (combining sellers’ earnings with buyers’ payments). Over a full year that comes to almost exactly $3.5 quadrillion. A few particulars:

Dollar role little changed: U.S. dollars figured in 89.2% of the world’s currency exchanges this spring. This figure has been stable throughout the 21st century, as earlier Triennial Surveys found dollars used in 88.6% of all currency transactions in 2022, a slightly lower 84.9% in financial crisis-plagued 2010, and 89.9% in 2001. Looking at other currencies, the Survey gives some substance to financial-press speculation about the Chinese renminbi’s rising role: renminbi showed up in 2% of currency exchanges in 2013, 4% in 2019, and 7% in 2025. The euro, yen, and pound shares have meanwhile dipped a bit, with euros down from 39% of transactions in 2013 to 31% in 2025, yen from 23% to 17%, and sterling from 13% to 10%.

U.K. the forex center: City of London banks and firms handle 38% of all world currency trades, or about $1 quadrillion worth each year. As context for a twelve-zero number like this — $1,000,000,000,000,000 — “world GDP” is about $120 trillion, so London’s quadrillion in forex turnover is about 10 times the size of the ‘real’ goods and services world economy. New York ranks second with 19%, while Asia’s three big currency trading centers — Singapore, Hong Kong, and Tokyo — have 12%, 7%, and 4% respectively, or 23% combined. Most exchange of major currencies basically track this division of labor, but renminbi trading is a little unusual; it isn’t concentrated in any one place, but instead is roughly evenly divided between London, Hong Kong, Shanghai, Singapore, and New York.

Collapse of ruble trading: The survey’s calculations, which show 39 individual currencies as well as worldwide totals, typically show trading levels in any particular currency rising over time, though at different rates. One bright-red exception: under the weight of international sanctions — for example, U.S., UK, EU, and Japanese prohibitions on transactions with the Russian central bank, purchasing of ruble-denominated bonds, and lending to Russian financial institutions — along with Russia’s own currency restrictions, trading in Russian rubles has plunged by 96% since the full-scale invasion of Ukraine in early 2022.

The actual numbers here: the $72 billion in daily ruble trading in 2019 fell to $13 billion in 2022, and to $3 billion in 2025. As a point of comparison, this $3 billion is just above the $1 billion in daily trading in Argentine pesos and a notch below the $4 billion in Bulgarian lev exchange. By market, ruble trading is down 95% in Singapore, 96.5% in London, 99% in New York, 99.4% in Hong Kong, and 99.9% in Zurich. Those wishing to dispose of rubles do, though, have one notable refuge: ruble trading has grown about 100-fold in the United Arab Emirates — $18 million in 2019, $2.7 billion in 2025 — which now does almost two-thirds of all world ruble trading.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Read the full email and sign up for the Trade Fact of the Week.

Testimony: USMCA is Not Broken, Doesn’t Need Major Changes

Posted on December 3, 2025December 3, 2025 by Alyssa Brown

Hearing on Operation of the USMCA (December 3, 2025)

Thank you very much for this opportunity to testify this morning, as the U.S. Trade Representative Office considers the functioning of the U.S.-Mexico-Canada Agreement over the past six years in preparation for next July’s scheduled “review.”

By way of introduction, I am Vice President of the Progressive Policy Institute (PPI) in Washington, D.C., a 501(c)(3) nonprofit research institution established in 1989, which publishes a wide range of public policy topics. In this position, I oversee PPI’s research and publications on trade and global economy matters. Before joining PPI, I served at USTR from 2015 to 2021 as Assistant U.S. Trade Representative for Trade Policy and Economics, with responsibility for overseeing USTR’s economic research and use of trade data, interagency policy coordination, including chairing the interagency Trade Policy Staff Committee, and administration of the Generalized System of Preferences.

The U.S.-Mexico-Canada Agreement, successor to the North American Free Trade Agreement, has been in force since July 1, 2020. As approved by Congress in 2019, its Final Provisions chapter includes a clause directing the U.S., Mexican, and Canadian governments to conduct a “review” after six years — that is, by July 2026 — and decide whether changes to the Agreement might be useful.

Our core view is that USMCA is working reasonably well. It is a very large agreement, spanning many different industries and applying to nearly $2 trillion in U.S. goods and services trade. And like any large human creation, USMCA is by definition imperfect. But it is accomplishing its main goals — facilitating trade in agriculture, services, energy, and manufacturing, helping digital trade channels stay open, encouraging joint work on wildlife trafficking and ocean health, providing Americans with reliable and low-cost consumer goods and industrial supplies, and experimenting with a novel approach to labor issues.

Meanwhile, and quite recently, very large problems unrelated to the agreement have emerged in U.S. trade, generally, and in relations with Canada and Mexico specifically. Since this past February, the Trump administration’s profligate imposition of tariffs, and accompanying threats against Canada and Mexico, have caused a series of genuine crises: damage to the Constitutional separation of powers; erosion of relationships at the core of U.S. national security; and a deteriorating economy as tariffs raise the cost of living for families, sap growth, and diminish the competitiveness of U.S. farming and manufacturing.

The Final Chapter “review” clause entails assessment rather than requiring any particular action. And while in different circumstances it might be useful to look in detail at ways to bring the agreement closer to perfection, in the actual circumstances of 2025 and 2026, policy vis-à-vis Mexico and Canada should focus on ending these self-created crises and mitigating their effects.

If the administration nonetheless wants to proceed with revisions to the agreement, our view is that such a program should come only after three steps:

Congressional passage of legislation terminating “emergency” and “national security” tariff decrees under laws like “IEEPA,” “Section 232,” and “Section 301” and requiring votes on any future Presidential imposition of tariffs (or other import limits) with some carefully circumscribed exceptions.
Stabilization of North American security by restoring trust, mutual respect, and common interest as the foundation of U.S. policy for America’s neighbors.
Restoration of Constitutionally appropriate policymaking, with Congress setting negotiating objectives for any significant changes in USMCA and voting to approve, or not, any resulting accord.

With these done, it would be appropriate, and might be useful, to look closely at the USMCA and see whether broad consensus exists for changes that would improve it. Absent them, we do not believe such a program is currently appropriate.

2025	$3.502 quadrillion
2022	$2.726 quadrillion
2019	$2.402 quadrillion
2016	$1.849 quadrillion
2010	$1.450 quadrillion
2001	$0.452 quadrillion
1992	$0.298 quadrillion
1970	$0.006 quadrillion

Currency exchange, 2025	$1,750 trillion
Total privately held wealth, 2024	~$475 trillion
World GDP, 2025	$117 trillion
All physical money in banks, bills, & coins	$50 trillion
All goods/service trade, 2024	$33 trillion
All circulating bills and coins	~$8 trillion

2025 trade growth was the fastest since 2021

FACT: 2025 trade growth was the fastest since 2021.

THE NUMBERS:

WHAT THEY MEAN:

FURTHER READING

ABOUT ED

FACT: Refunding illegally collected tariff money is not difficult.

THE NUMBERS:

WHAT THEY MEAN:

FURTHER READING

ABOUT ED

FACT: Supreme Court: Presidents cannot use “international emergencies” as pretexts to create their own tariff systems.

THE NUMBERS: U.S. GDP growth, last five years–

WHAT THEY MEAN:

FURTHER READING

ABOUT ED

FACT: U.S. manufacturing employment is down 108,000 in 2025

THE NUMBERS: U.S. pop-up toaster tariffs and employment–

WHAT THEY MEAN:

FURTHER READING

ABOUT ED

FACT: Valentine’s Day boxed chocolate prices are up 11.8% this year.

THE NUMBERS: Tariff increases on cacao and chocolate, Jan.-November 2025*

FURTHER READING

Some V-Day Chocolate History

And some science:

ABOUT ED

FACT: Most Americans disliked higher tariffs a year ago, and few minds have changed since.

THE NUMBERS: CNN/SSRS surveys on Trump tariffs –

FURTHER READING

ABOUT ED

FACT: The U.S. lost 20,000 scientific research jobs last year.

THE NUMBERS: Real-dollar growth in R&D spending, 2020-2023* –

WHAT THEY MEAN:

FURTHER READING

FACT: The U.S. has no claim to Greenland.

THE NUMBERS: Trump tariff threats last week –

WHAT THEY MEAN:

FURTHER READING

FACT: Venezuela oil production is down 75% since 1998.

THE NUMBERS: Venezuelan GDP (constant 2015 dollars*) –

* World Bank WHAT THEY MEAN:

FURTHER READING

ABOUT ED

FACT: The Trump administration is not protecting freedom of speech.

THE NUMBERS: Some people denied U.S. visas –

FURTHER READING

ABOUT ED

FACT: Tariff bill on toys and Christmas ornaments are up 300-fold this year, from $7 million to $2 billion.

THE NUMBERS: U.S. tariff collection, January-September* –

WHAT THEY MEAN:

FURTHER READING

ABOUT ED

FACT: Worldwide HIV/AIDS mortality down 80% since PEPFAR launch.

FURTHER READING

ABOUT ED

FACT: Foreign exchange trading in rubles is down by 96%.

THE NUMBERS: Daily currency exchange* —

WHAT THEY MEAN:

FURTHER READING

ABOUT ED

Hearing on Operation of the USMCA (December 3, 2025)

* World Bank

WHAT THEY MEAN: