Rest assured, though, other countries have not let this crisis go to waste. Taking matters into their own hands, other governments have been actively signing free trade agreements with one another. Recently, the EU, Brazil, Argentina, Uruguay, and Paraguay announced a free trade deal that covers 780 million people. This is a big deal because the South American trade bloc had relatively high tariffs against the E.U. The E.U. and Japan have also completed a free trade agreement.
E.U. members updated their trade deal with Mexico as well and just signed a trade agreement with Vietnam to eliminate 99 percent of the tariffs on goods and services between European and Vietnamese markets. Meanwhile, the 12 Trans-Pacific Partnership nations, which includes Japan, have looked to finalize the deal with other potential partners after Trump rejected the deal on his first day in office.
Even protectionist China has been active. It has effectively been dropping its tariffs against U.S. competitors while it raised its duties against U.S. producers. Chad Bown of the Peterson Institute for International Economics calculated that China’s tariffs against the United States rose from 8 percent on January 1, 2018, to 20.7 percent on June 1, 2019. Tariffs against all other countries, however, went down from 8 percent to 6.7 percent during that same period. As Bown writes, “Now, there is a 14 percentage point difference between the average Chinese tariff U.S. exporters face versus all other exporters.”