Trade Policy is in the Crosshairs
It’s not exactly news to anyone that President Trump has trade policy in his sights in an apparent effort to deliver the maximum benefit for U.S. industry and economic development.
With the first Trump presidency as a guide, it seems highly likely the next four years will deliver a fast-paced, aggressive, and far-reaching use of international trade tools to further the administration’s national security and foreign policy goals. The outcome is likely an introduction of significant tariffs on U.S. imports to an extent not seen since in almost 100 years.
The 25% tariff on Chinese imports initiated by the first Trump administration and then expanded by the Biden administration created costs and reduced investment.
Starting in 2018, Trump began a wave of $250 billion in tariffs against China. China then struck back with its own set of tariffs against the U.S. in a back-and-forth economic battle that disrupted global trade dynamics.
Trump’s trade war with China cost Americans an estimated $195 billion since 2018, according to the conservative think tank American Action Forum.
2017 Administration Policies VS 2025 New Proposals
THEN
- Twenty five percent tariff on Chinese imports
- $250 billion in tariffs against China
- Withdrew the U.S. from the Trans-Pacific Partnership (TPP)
- Renegotiated NAFTA into the United States-Mexico-Canada Agreement (USMCA)
NOW
- Proposed a universal baseline tariff of up to twenty percent on nearly all goods imported into the United States
- Proposed a sixty percent tariff on all imports from China
- Focus on securing more favorable bilateral agreements with major economic powers
- Proposed a twenty five percent tariff on Mexico and Canada
More Tariffs
Tariffs are a key feature of international trade policy in the new administration. President Trump has proposed a universal baseline tariff of up to twenty percent on nearly all goods imported into the United States and a sixty percent tariff on all imports from China. President Trump has also repeated calls from his first term to pass a “Reciprocal Trade Act“.
These proposed tariffs, along with possible retaliation by foreign governments will directly impact global supply chains and could lead to decreases in the availability of certain goods and increases in the cost of goods globally.
Already, the European Union and China have indicated they are prepared to retaliate if the new administration moves forward with the Proposed Tariffs.
We note that President-elect Trump’s promise to reduce regulation and taxes during his second term could offset some of the impact of the Proposed Tariffs.
Bilateral vs Multilateral Deals
Another key feature of Trump’s trade policy was his preference for bilateral trade deals over multilateral agreements. During his first term, he withdrew the U.S. from the Trans-Pacific Partnership (TPP), arguing that it hurt American workers. Instead, he focused on one-on-one trade agreements, such as renegotiating NAFTA into the United States-Mexico-Canada Agreement (USMCA).
Under the USMCA, there is a six-year renegotiation provision that mandates a review of the agreement in 2026. In a second term, Trump will continue this approach, focusing on securing more favorable bilateral agreements with major economic powers as well as strategically important countries. Theoretically these deals would prioritize American workers and industries and could include provisions related to intellectual property, labor standards, and environmental protections—consistent with Trump’s focus on trade deals that benefit the U.S. specifically.
Seemingly inconsistent with the USMCA, Trump has proposed 25% tariffs on Mexico and Canada. Imports from Mexico and Canada are the USA’s first and third largest sources of imports respectively, worth over $900 billion in 2023. In addition, approximately 50% of U.S. trade with Canada and Mexico is driven by supply chains in sectors such as automobiles, medical equipment, energy, and agricultural products. This means that products cross borders back and forth as they are manufactured.
The 25% proposed tariff applied each time a product moves along supply chains will add up quickly and raise prices, rendering many of these supply chains economically unviable.
Supply Chain and National Security
The COVID-19 pandemic exposed vulnerabilities in global supply chains, particularly in industries like pharmaceuticals, medical supplies, and electronics. Trump has long advocated for reshoring critical industries to the U.S. and reducing reliance on imports from adversarial nations like China.
In his second term, this issue will likely also be a major focus, with potential policy efforts including nearshoring key manufacturing to bring critical manufacturing jobs back to the U.S., particularly in high-tech sectors like semiconductors and biotechnology.
It’s also likely we’ll see continued investment in strategic stockpiles of critical materials and goods, such as medical supplies, to reduce the U.S.’s dependence on foreign suppliers for essential products.
We’ll Just Have to Wait and See
As Donald Trump returns to the White House with a Republican-controlled Congress, navigating the complexities of U.S. trade policy will be a pivotal challenge. With ambitious goals for reshoring manufacturing, expanding tariffs, and securing bilateral trade deals, the administration will face both opportunities and obstacles. It remains to be seen how the rest of us who operate in the global trade landscape will be affected by the same opportunities and obstacles.
For a deep exploration of the new administration’s trade policies, their real-world consequences, and how to navigate the new global trade landscape, be sure to join the concurrent session: Navigating New Policies: Expert Insights on the Future of Freight and Logistics Under the New Administration, at AirCargo 2025 this March.