What's going on?

It�s already looking like a topsy-turvy year for global trade: just as a controversial Trans-Pacific free-trade deal was finally agreed on Tuesday (without the US), the White House announced it was ratcheting up tariffs (a.k.a. import taxes) on � wait for it � washing machines. (tweet this)

What does this mean?

Washington also slapped new tariffs on solar panels, and the measures (which may add up to 50% to the cost of such imports) will supposedly help clamp down on American imports of washers and panels from countries where lower labor costs, among other factors, allow manufacturers to make �em cheaper � undercutting American competitors. Some, however, have a more cynical take.


On the opposite end of the belief spectrum, eleven Pacific Rim countries agreed to sign a tariff-slashing deal formerly known as the Trans-Pacific Partnership. Last January, Donald Trump pulled the US out of the deal, which encourages cross-border investment, in order to � you guessed it � protect US companies from being undercut.

Why should I care?

For markets: American manufacturers stand to gain if trade policy plays out in their favor.

Shares of Whirlpool, the American manufacturing firm which lobbied for the tariffs, jumped by 3% on Tuesday. US automakers and automotive suppliers may also stand to gain from renegotiations between the US, Canada and Mexico on the North American Free Trade Agreement (NAFTA) that began on Tuesday.

The bigger picture: In some parts of the world, free trade is falling out of favor.

The idea that lowering barriers to trade is much better in the long run for all partners involved is an old one � but in recent decades, as manufacturing jobs have been outsourced and inequality has grown in developed economies, some are no longer so sure. The US used to be a major proponent of free trade across the world � but now, under Donald Trump, America�s line is that it�s more important to make sure free trade is actually fair trade.