An Overview of President Trump's Trade Policy to Date
Highlights
- President Donald Trump issued a presidential memorandum titled "America First Trade Policy" on Jan. 20, 2025, outlining the immediate trade priorities for his administration. The memorandum directs various federal agencies and the Office of the United States Trade Representative (USTR) to evaluate key aspects of U.S. trade policy and issue reports to the president no later than April 30, 2025 (and, in some cases, on April 1).
- The memorandum covers three main areas: addressing unfair and unbalanced trade, economic and trade relations with the People's Republic of China (PRC), and additional economic security matters. The memorandum also hints at an aggressive timeline for United States-Mexico-Canada Agreement (USMCA) review.
- Additionally, on Jan. 21, 2025, President Trump indicated his intention to impose the threatened 10 percent tariffs on China and 25 percent tariffs on Mexico and Canada by Feb. 1, 2025.
- Communications from the White House during the Jan. 26, 2025, row between the U.S. and Colombia suggest that President Trump will likely rely on the International Emergency Economic Powers Act (IEEPA) to quickly impose tariffs as part of his administration's foreign policy strategy.
President Donald Trump issued a presidential memorandum titled "America First Trade Policy" on Jan. 20, 2025, outlining the immediate trade priorities for his administration. The memorandum directs various federal agencies and the Office of the United States Trade Representative (USTR) to evaluate key aspects of U.S. trade policy and issue reports to the president no later than April 30, 2025 (and, in some cases, on April 1).
These reports could serve as justification for trade measures, including tariffs President Trump may announce, but he recently indicated some tariffs (on imports from Canada and Mexico) could be imposed as soon as Feb. 1, 2025.
The memorandum covers three main areas: 1) addressing unfair and unbalanced trade, 2) economic and trade relations with the People's Republic of China, and 3) additional economic security matters. The memorandum requests that reports, to be coordinated by specific agencies, be provided in April.
Unfair and Unbalanced Trade
This section calls for the U.S. Department of Commerce Secretary, U.S. Department of the Treasury Secretary and USTR, alone or in conjunction, to:
- assess the U.S. trade imbalance with trading partners and recommend remedies (including a global supplemental tariff)
- determine the feasibility of creating an External Revenue Service to collect tariffs from exporters
- assess unfair practices by all trading partners and propose remedies under existing U.S. law and trade agreements
- begin the stakeholder consultation process in advance of U.S.-Mexico-Canada Agreement (USMCA) review and assess the agreement's impact on U.S. workers, farmers, ranchers, service providers and other businesses, as well as make recommendations regarding U.S. participation in the agreement
- determine whether trading partners are manipulating their currency to disadvantage U.S. businesses in international trade and propose remedies, including identifying countries that should be designated as currency manipulators
- review existing trade agreements and recommend changes to achieve more reciprocal and mutually advantageous trade relationships
- identify new bilateral or sector-specific trade agreement opportunities, with the goal of increasing export opportunities for U.S. workers, farmers, ranchers, service providers and other businesses
- review the process for applying anti-dumping and countervailing duties (AD/CVD) laws and ensure foreign supplier compliance with AD/CVD measures
- assess risks to the national economy and public health associated with goods, including illegal drugs, entering the country under the de minimis provision (19 U.S.C. 1321) and propose changes
- investigate whether any countries subject U.S. entities to discriminatory or extraterritorial taxes, pursuant to 26 U.S.C. 891
- review international trade agreements, including the World Trade Organization (WTO) Agreement on Government Procurement, to ensure their implementation is consistent with provisions of Executive Order (EO) 13788 (issued by President Trump in April 2017 during his previous term)
Economic and Trade Relations with the PRC
This section calls for USTR and the Commerce Secretary to:
- evaluate China's compliance with the Economic and Trade Agreement Between the Government of the United States of America and the Government of the People's Republic of China (PRC) and recommend actions, including tariffs, based on this evaluation
- review USTR's May 2024 report titled "Four-Year Review of Actions Taken in the Section 301 Investigation: China's Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation" and recommend actions, including tariffs, based on the report review
- review other Chinese trade actions and practices that may be unfair and unreasonable and recommend actions consistent with 19 U.S.C. 2411 to address any such unfair or unreasonable trade actions or practices
- review legislation that Congress is considering that relates to China's permanent normal trade relations status and recommend changes
- review the treatment afforded to Chinese entities with respect to U.S. intellectual property rights (IPR), focusing on the need for reciprocity in IPR rights
Additional Economic Security Matters
Various agencies are charged with:
- conducting an economic and security review of the U.S. industrial and manufacturing base to determine the need for investigations to "adjust imports that threaten the national security of the United States" under 19 U.S.C. 1862 (also known as Section 232)
- reviewing the effectiveness and impacts on national security of exclusions, exemptions and other import measures under the steel and aluminum tariffs imposed pursuant to 19 U.S.C. 1862 and recommending changes
- reviewing the U.S. export control system and recommending changes in light of developments involving adversaries, rivals, national security and global considerations, including the effectiveness of export control enforcement policies and practices and enforcement mechanisms to incentivize compliance by foreign countries
- reviewing and recommending appropriate action with respect to the rulemaking by the Office of Information and Communication Technology and Services (ICTS) on connected vehicles and determine whether such action should also be taken with respect to other connected devices
- reviewing EO 14105 and the final rule implementing this EO (89 Fed. Reg. 90398), issued by the Biden Administration regarding outbound investment in critical technologies, to determine whether they adequately address national security threats or should be modified or rescinded and replaced
- assessing any "distorting impact of foreign government financial contributions or subsidies" on U.S. federal procurement programs and recommending changes to such programs to reduce or eliminate these distortions
- "[a]ssess[ing] the unlawful migration and fentanyl flows from Canada, Mexico, the PRC, and any other relevant jurisdictions" and recommending measures to address these emergencies
The agencies were given an April 1, 2025, deadline to submit all but one (the assessment of foreign government impacts on U.S. federal procurement programs) of these reports to the president.
Analysis
The requested reports would appear to provide the justification for imposing measures, including tariffs, in the near term. To that end, these reports could perhaps replace the longer process required for imposition of tariffs or other measures under trade laws that President Trump used during his first term.
In the run-up to his inauguration, President Trump announced his intention to impose an additional 10 percent tariffs on China, as well as an additional 25 percent tariffs on Mexico and Canada. President Trump suggested that he would impose these tariffs immediately upon taking office. The legal mechanism for immediately imposing tariffs remains unclear. However, President Trump has expressed frustration with the procedural requirements that slowed the imposition of tariffs during his first administration.
Specifically, the imposition of tariffs under Section 232 of the Trade Expansion Act of 1962 during President Trump's first term required an investigation by the Commerce Department. Similarly, the imposition by President Trump of tariffs (during his first term) on Chinese imports under Section 301 of the Trade Act of 1974 required an investigation by USTR. Such investigations can take months.
President Trump has expressed interest in other trade law remedies that do not require an investigation prior to the imposition of tariffs. Many of these trade law remedies have not been previously used to impose tariffs. The legality and limitations of these mechanisms are unclear. However, the courts tend to defer to the president on trade matters. Therefore, this ambiguity provides President Trump potentially significant flexibility.
The reports President Trump requested – all due in April 2025 – could serve as the basis or justification for the imposition of tariffs utilizing other trade law remedies, including Section 122 of the Trade Act of 1974, Section 338 of the Tariff Act of 1930 and the International Emergency Economic Powers Act.
Because President Trump previously threatened tariffs under the IEEPA during his first administration, the act has generally been considered the most likely mechanism for any immediate tariffs. The IEEPA allows the president to "prohibit transactions" and "regulate" the importation and exportation of goods during a time of emergency presenting an "unusual and extraordinary threat … to the national security, foreign policy, or economy of the United States." It has been argued that those terms could be interpreted to include tariffs.
Being that President Trump requested agency reports on specific issues, this may suggest that he take a more nuanced approach to tariffs, instead of imposing a general tariff on all imports from certain countries.
However, on Jan 21, 2025, President Trump indicated his intention to impose the threatened 10 percent tariffs on China and 25 percent tariffs on Mexico and Canada by Feb. 1 2025. If imposed on Feb. 1, these tariffs would not be influenced by the April reports. This suggests that any tariffs imposed may be more general (i.e., a countrywide tariff or tariffs on imports for certain industries).
Though the April reports will not influence any immediate tariffs, the memorandum offers insight into the Trump Administration's strategy on tariffs. The memorandum references U.S. national security interests throughout. For example, the policy references assessing "the unlawful migration and fentanyl flows from Canada, Mexico, the PRC" and requests that these agencies recommend appropriate "trade and national security measures to resolve that emergency."
The memorandum contextualizes the unlawful migration and fentanyl flows from Canada, Mexico and the PRC as an emergency and requests trade and national security measures to resolve it. Since this language mirrors the requirements of the IEEPA, this suggests that President Trump may rely on the IEEPA to impose tariffs on Feb. 1.
During the Jan. 26, 2025, row between the U.S. and Colombia over the repatriation of undocumented immigrants, President Trump's post on Truth Social threatened "Emergency 25% tariffs on all goods coming into the United States. In one week, the 25% tariffs will be raised to 50%." He did not directly cite to the IEEPA in threatening tariffs but did cite the act in threatening "IEEPA Treasury, Banking and Financial Sanctions to be fully imposed." A statement from the U.S. press secretary referenced "fully drafted IEEPA tariffs and sanctions." The statement claimed the tariffs and sanctions would be held in reserve pending Colombia's cooperation. This further suggests that the Trump Administration will likely rely on the IEEPA when seeking to quickly impose tariffs.
Once the president declares an emergency pursuant to the IEEPA, the president must "consult" with Congress before taking action and transmit a report to Congress "immediately" upon taking such action. The IEEPA does not require an investigation by a federal agency prior to action. Because Congress is controlled by the Republican Party, if President Trump relies on the IEEPA, he could take action quickly.
The president's memorandum on trade also hints at an aggressive timeline for USMCA review. That joint review process by the parties of the agreement (U.S., Mexico and Canada) is scheduled for July 1, 2026. The USMCA review process is governed by the implementing legislation in the U.S. The executive branch (the President and USTR) represents the U.S. in the joint review. USTR is required to seek stakeholder/public input in 2025 and to report its joint review recommendations to Congress by the end of 2025. The parties must deliver their recommendations to each other no less than one month before the joint review date on July 1, 2026.
Interested clients should work with their Holland & Knight attorneys and professionals to engage the Trump Administration to ensure they understand the impact on businesses of any measures under consideration. For questions on a specific matter, please reach out to the authors.
Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.