During his campaign, President Trump often stated that he would be implementing an “America First” international trade policy, which he said explicitly would include higher tariffs, potentially on imports from the entire world. On January 20, President Trump issued a presidential memorandum taking the first steps toward implementing this agenda. This “America First Trade Policy” memorandum directs that multiple federal agencies report back to him by April 1, 2025, on a number of potential measures designed to help implement “a robust and reinvigorated trade policy that promotes investment and productivity, enhances our nation’s industrial and technological advantages, defends our national security, and — above all — benefits American workers, manufacturers, farmers, ranchers, entrepreneurs, and businesses.”

While the memorandum mostly is cast as a request for informational trade reports, the best way to view this memorandum is as a potential roadmap to the international trade priorities of the new administration. The wide range of issues covered, including the causes of the U.S. annual trade deficits in goods, the economic and national security implications and risks of such deficits, a specific focus on all aspects of trade with China, and an evident desire to reshore significant amounts of goods produced abroad by U.S. companies indicate that nearly all aspects of U.S. international trade are under scrutiny.

As detailed in Part I of our three-part series on Managing Import Risks Under the New Trump Administration, many multinational companies are actively engaged in risk planning the potential impact of the new administration on their international supply chains. The issuance of this new memorandum underscores the urgency of proceeding along these lines. Thus, a thorough understanding of the potential implications of this new memorandum is essential for risk planning a response. Below we list the implications of each of the ordered study items:

“Addressing Fair and Unbalanced Trade”

“Economic and Trade Relations with the People’s Republic of China”

“Additional Economic Security Matters”

Implications

While the memorandum outlines a vast series of reviews of U.S. trade policy and investigations of trade imbalances and unfair practices, it is not yet clear how this very broad laundry list of international trade objectives will play out. Potential outcomes range from using the threat of tariffs to accomplish other goals (e.g., immigration, fentanyl) to setting up renegotiations of Free Trade Agreements on more favorable terms (particularly for the USMCA), to the establishment of permanently higher tariffs. Notably, the memorandum raises questions as to the future of U.S.-Mexico trade relations, a focus that takes on increased urgency given the impending trilateral review when combined with President Trump’s focus on immigration and fentanyl from Mexico and Canada. The focus on revisiting the USMCA threatens increased restrictions or provisions that may disadvantage Mexico’s export-driven economy and impact Mexico’s role as a key U.S. trading partner, with particularly strong implications for the U.S. automotive sector.

Given these concerns, Part III of this series will focus on concrete steps that multinational companies can take to risk plan for potential major changes in the international trade environment, particularly with regard to the topics of potential changes to tariff rates, potential changes to the USMCA, and potentially greater scrutiny of supply chain integrity requirements, particularly as they relate to China and imports using Chinese parts and components.

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