A First Look at Trump’s Trade Policy
In his first few hours in office, President Trump outlined the broad contours of his “America First Trade Policy.” Among the primary objectives: to “reduce dependence on foreign nations for critical supply chains,” “promote investment and productivity” and “enhance our [n]ation’s industrial and technological advantages.”
Key takeaways: The president did not announce new tariffs. His executive order instructs key agencies to begin looking at underlying concerns about unfair or unbalanced trade, specific concerns regarding trade with China and matters related to economic security. The findings could form the basis for the administration’s choice of remedy, potentially leading to more tariffs and other policy measures.
- President Trump “is wasting no time in taking action to strengthen America’s hand on trade, and manufacturers appreciate his focus on combatting unfair practices that hurt American workers,” NAM President and CEO Jay Timmons wrote on Tuesday.
What comes next: Three comprehensive reports are due by agencies to the President by April 1. Issues to be investigated include:
- Persistent trade deficits;
- Unfair trade practices;
- Currency manipulation;
- Importation of counterfeit products and contraband;
- China’s compliance with the “Phase One” deal; and
- Review of the U.S. export control system.
Tariffs on Canada, Mexico and China: The EO tasks the Commerce Department with assessing unlawful migration and fentanyl flows from Canada, Mexico and China. The findings are also due April 1.
- Prior to that date, President Trump could issue a separate EO using international emergency powers. This would enable him to impose tariffs sooner.
Building on past success: The president cited the China Phase One deal, the United States–Mexico–Canada Agreement and Section 232 tariffs as successful elements of his first-term agenda.
Expect USMCA review to kick into gear: The EO also instructs the United States Trade Representative to begin its public consultation processes in preparation for the six-year review of the USMCA and to assess the impacts of U.S. participation in the agreement.
The NAM’s view: Speaking to CTV from the Canadian Embassy on Inauguration Day, NAM President and CEO Jay Timmons said:
- “We are in a global economy, and we want to be able to produce as much as we can. We need the entire continent of North America to be able to do exactly that.”
- “The United States, Canada and Mexico—because of the USMCA that was negotiated and implemented a few years ago—has the opportunity to take on together some actions to thwart problematic, market-distorting practices that are coming out of other countries, specifically China.”
Related news: In another EO, the president pulled the U.S. out of the Organization for Economic Co-operation and Development global tax deal on the grounds that the agreement “allows extraterritorial jurisdiction over American income but also limits our nation’s ability to enact tax policies that serve the interests of American businesses and workers.”