The US sees trade allies more like adversaries

On March 31, the Office of the United States Trade Representative released its 2026 National Trade Estimate Report on Foreign Trade Barriers. What’s even more striking than its length of nearly 550 pages is its uniformly negative tone. 

Now in its 41st edition, the National Trade Estimate Report is an annual exercise cataloguing what the executive branch considers the most significant obstacles to U.S. exports. The words it uses to balance acknowledgement of improvement against grievance, progress against criticism, reveals how the administration views its trading partners. While the language might seem merely procedural, it is anything but. 

Using natural language processing, we set out to analyze the “sentiment” embedded in the 2026 report and put it in historical perspective. To achieve this, we fine-tuned a model on thousands of labeled sentences, enabling it to capture the nuances of trade policy language and accurately reflect the trade office’s overall rhetorical posture with nearly 90 percent accuracy. 

We ran the model on 1,251 country-year National Trade Estimate Report entries spanning 2007 to 2026. Each country chapter was assigned a score from -1 (maximally negative) to +1 (maximally positive).  

The 2026 report records the tightest cross-country spread in our 20-year dataset. In plain terms, the U.S. is describing its trading partners in increasingly uniform language, and that language is decidedly negative. 

The results further reveal two clear patterns, neither of which is subtle. First, the “deal dividend” is enormous. Countries that signed one of President Trump’s Agreements on Reciprocal Trade or a framework saw a dramatic improvement in how they are described. Across the nine countries that inked an Agreement on Reciprocal Trade, sentiment rose significantly; among the 46 countries without new agreements, sentiment fell.

The country-level changes are dramatic. Sentiment for El Salvador and Malaysia jumped from negative into positive territory after they made deals. Argentina followed a similar trajectory after its February 2026 deal. Every country that got an Agreement on Reciprocal Trade saw its score improve. 

This is not noise, but a pattern. One interpretation might be that these agreements reflect genuine barrier removal, and the improved sentiment follows accordingly. In some cases, that could be true. But the uniformity and magnitude of the shift suggests something more: The National Trade Estimate is functioning as a diplomatic scorecard. Countries that align with the administration’s agenda are rewarded with warmer language. Those that don’t follow suit are downgraded.

Second, the traditional “free trade agreement premium” has effectively disappeared. For most of the National Trade Estimate’s modern history, countries that signed free trade agreements with the U.S. enjoyed a significant sentiment advantage. That relationship has now collapsed. In 2026, the gap between free trade agreement and non-free trade agreement countries is effectively zero. 

The implications are significant. The traditional free trade agreement model rested on a simple bargain: Open your markets through negotiated agreements and receive more favorable treatment in both rhetoric and enforcement. That bargain no longer holds. 

The data bear this out. Australia, a close ally with a free trade agreement in force since 2005, posted its most negative sentiment score on record. Mexico, a member of the U.S.-Mexico-Canada Agreement, also fell to its lowest ever. Neither country has concluded a new agreement on reciprocal trade.

In contrast, Bangladesh — long outside the free trade agreement system — recorded a positive score after signing an Agreement on Reciprocal Trade and has seen one of the largest sentiment increases in the dataset since 2023. 

The bottom line is that the currency of favor in Washington’s trade discourse has changed. It no longer matters whether a country signed a free trade agreement with the U.S. years ago, but whether it has effectively “renewed its vows” under the current administration. 

Marc L. Busch is the Karl F. Landegger Professor of International Business Diplomacy at the Walsh School of Foreign Service, Georgetown University. Justin Grossman is a Technical Analyst at Enterprise Knowledge and a recent graduate of the Walsh School of Foreign Service, Georgetown University.

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