Project 2025 Trade Chapter: Tariffs Without Worker Standards Won't Fix the Trade Deficit

Project 2025's trade chapter is right about the diagnosis — America's chronic trade deficit and Chinese mercantilism are serious problems — but its prescription is a dead end. The chapter, authored by Peter Navarro, calls for unilateral tariff increases and reform of the WTO's most-favored-nation (MFN) rule, but says nothing about enforceable labor and environmental standards in trade agreements. That's a fatal omission: tariffs alone, as we've now seen with the enacted Liberation Day tariffs in April 2025, have already cost 89,000 manufacturing jobs (CAP) while retaliatory tariffs hit $223 billion in U.S. exports (Tax Foundation). The USMCA, Trump's signature deal, promised to end job offshoring but instead the U.S. trade deficit with Mexico and Canada has ballooned to a projected $263 billion in 2025 (EPI). Without binding labor standards — like Mexico's capacity to enforce its own labor law reforms — the agreement has failed workers.

The America First Trade Policy executive order, signed January 20, 2025, initiated reviews of trade agreements and tariff policies, aligning with the Project 2025 playbook. But so far the administration has focused on headline-grabbing tariff actions without pursuing the worker-centered enforcement that fair trade demands. The 2025 Trade Policy Agenda includes a reassessment of China's permanent normal trade relations, which could be a legitimate tool if paired with multilateral coordination and domestic industrial policy — but unilateral revocation, as Project 2025 envisions, would isolate the U.S. and invite retaliation. A fair trade alternative would: 1) make labor and environmental standards preconditions for tariff reductions, 2) use targeted industrial policy (like the CHIPS Act) to onshore production, and 3) enforce supply-chain transparency to block goods made with forced or child labor. The only thing worse than bad trade deals is bad trade policy that leaves the race to the bottom intact while alienating allies and punishing American consumers.

Rethink Trade's tracking of USMCA outcomes confirms that agricultural and food trade deficits with Mexico and Canada have increased under the deal, contradicting promises of job-shoring and farm export gains. The lesson is clear: trade policy must be rewritten from the ground up around worker and environmental rights, not recycled protectionism. The tariffs already in place should be restructured to incentivize collective bargaining and emissions reductions, not used as a blunt instrument that hits American families and trading partners equally.