U.S. Trade Policy Primer: Frequently Asked Questions (CRS Report for Congress)
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| Release Date |
Revised Feb. 4, 2021 |
| Report Number |
R45148 |
| Report Type |
Report |
| Authors |
Cimino-Isaacs, Cathleen D.;Akhtar, Shayerah Ilias;Casey, Christopher A.;Fefer, Rachel F.;Fergusson, Ian F.;Jackson, James K.;Jones, Vivian Catherine;Morrison, Wayne M.;Schwarzenberg, Andres B.;Villarreal, M. Angeles;Weiss, Martin A.;Williams, Brock R. |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
Congress plays a major role in U.S. trade policy through its legislative and oversight authority.
Since the end of World War II, U.S. trade policy has focused on fostering an open, rules-based
global trading system, liberalizing markets by reducing trade and investment barriers through
negotiations and agreements, and enforcing trade commitments and related laws. International
trade and investment issues can affect the overall health of the U.S. economy and specific sectors,
the success of U.S. businesses, U.S. employment opportunities, and the overall standard of living
of Americans. The benefits and costs of international trade and the future direction of trade policy
are active areas of interest for many in Congress.
This report addresses frequently asked questions regarding U.S. trade policy and is intended to
assist Members and staff who may be new to trade issues. The report provides context for basic
trade concepts and data on key U.S. trade and investment trends. It also addresses how U.S. trade
policy is formulated and describes the trade and investment policy tools used to advance U.S.
objectives. The report is divided into five sections:
The Basics of Trade explains key economic concepts, including why countries trade, the benefits
and costs of trade expansion, and the role of global value chains in international trade. The
section also highlights common trade terms and principles.
U.S. Trade Trends provides data on key U.S. trade relationships, the U.S. trade deficit, and
sector-specific issues related to manufacturing, agriculture, services, and digital trade.
Formulation of U.S. Trade Policy describes key objectives and functions of trade policy. The
section outlines the roles of Congress, the executive branch, private stakeholders, and the
judiciary in the formulation and implementation of U.S. trade policy.
U.S. Trade Policy Tools explains some of the key vehicles for advancing U.S. trade policy
objectives, including trade negotiations and agreements, special trade programs, tariff policy and
trade remedies, trade adjustment assistance, and export promotion programs and controls.
Link Between International Investment and Trade explains the motivations of foreign direct
investment (FDI) and its relationship to trade. The section provides data on top sources of FDI in
the United States as well as destinations of U.S. FDI abroad, and explains the role of investment
agreements and the Committee on Foreign Investment in the United States (CFIUS).
This report is intended as an introduction to U.S. trade policy and does not provide in-depth
coverage of all trade and investment issues. For more detail on U.S. trade policy issues, refer to
the following CRS products:
CRS Report R45474, International Trade and Finance: Overview and Issues for the
116th Congress, coordinated by Rebecca M. Nelson and Andres B. Schwarzenberg.
CRS Report R45420, U.S. Trade Trends and Developments, by Andres B.
Schwarzenberg.
CRS Report R44546, The Economic Effects of Trade: Overview and Policy Challenges,
by James K. Jackson.
CRS Report R45243, Trade Deficits and U.S. Trade Policy, by James K. Jackson.
CRS In Focus IF10156, U.S. Trade Policy: Background and Current Issues, by
Shayerah Ilias Akhtar, Ian F. Fergusson, and Brock R. Williams.
CRS In Focus IF11016, U.S. Trade Policy Functions: Who Does What?, by Shayerah
Ilias Akhtar.
