Trump 2.0: America First Trade Policy Takes Shape

On January 20, 2025, Donald J. Trump was inaugurated as the 47th President of the United States. Within hours of taking office, President Trump issued dozens of executive orders and an “America First Trade Policy” memorandum outlining his administration’s trade priorities and signaling an aggressive approach to reshaping U.S. trade, sanctions and national security policies. However, “Day 1” tariffs did not materialize despite previous announcements by President Trump that China, Canada and Mexico would be targeted. President Trump has informally suggested that 25% tariffs for Mexico and Canada and an additional 10% tariff for China remain possible by February 1, 2025.

Below, we highlight key components of the President’s early actions.

I. AMERICA FIRST TRADE POLICY

President Trump’s “America First Trade Policy” memorandum (Memorandum) sets the stage for sweeping changes in and review of existing U.S. trade policy. It allows the new administration to review existing measures by directing executive agencies to conduct reviews of current policies, with agency reports due to the President by April 1, 2025, and April 30, 2025, respectively. The Memorandum also offers insight into this administration’s trade priorities. We have outlined a number of these priorities, along with the Memorandum’s requirements, below.

Expanded Use of Tariffs
Tariffs are set to take center stage in the administration’s trade agenda as tools to protect domestic industries and combat perceived unfair trade practices. While President Trump did not follow up on his threat to issue tariffs on the first day of his new presidency, they are a clear priority of the administration. The Memorandum outlines the following:

• Global Supplemental Tariff: The Secretary of Commerce, in consultation with the Secretary of the Treasury and the U.S. Trade Representative (USTR), is tasked with investigating the causes and risks of persistent U.S. trade deficits and recommending measures, such as a “global supplemental tariff,” to address them.
• De Minimis Tariff Losses and Counterfeit Risks: The secretaries of Treasury, Commerce and Homeland Security, along with the Senior Counselor for Trade and Manufacturing and the USTR, will assess the loss of tariff revenues and risks from importing counterfeit goods and contraband drugs, such as fentanyl, due to the $800 duty-free de minimis exemption, and recommend modifications to safeguard U.S. revenue and public health. This follows measures made in the final days of the Biden administration to limit use of the de minimis exception.
• Review and Assessment of China Tariffs: The USTR will review the Economic and Trade Agreement with China to determine compliance and recommend actions, including tariffs, if needed. Additionally, the USTR will assess the May 14, 2024, report on the Section 301 investigation into China’s trade practices, including technology transfer and intellectual property issues, and evaluate potential additional tariffs or measures to address industrial supply chain concerns, circumvention through third countries, and costs imposed by unfair trade practices.
• Comprehensive Review of Section 232 Investigations and Measures: The Secretary of Commerce, in consultation with the Secretary of Defense and other relevant agencies, will evaluate the U.S. industrial and manufacturing base to determine whether new Section 232 investigations are necessary to address imports threatening national security. Concurrently, the Assistant to the President for Economic Policy, in coordination with the Secretary of Commerce, USTR, and the Senior Counselor for Trade and Manufacturing, will assess the effectiveness of existing Section 232 measures on steel and aluminum—such as exclusions and exemptions—and recommend adjustments to strengthen their impact on mitigating national security risks.
• Establishment of an External Revenue Service (ERS): The Secretary of the Treasury, in consultation with the secretaries of Commerce and Homeland Security, has been directed to investigate the feasibility of establishing an ERS. This proposed agency would be tasked with collecting tariffs, duties and other foreign trade-related revenues. At present, Customs and Border Protection (CBP) fulfills such duties, and it is unclear how ERS would interact with this agency’s pre-existing functions.

Export Controls
The Secretary of State and the Secretary of Commerce, in coordination with other export control agencies, will review the U.S. export control system to address challenges from strategic adversaries and geopolitical rivals. The review will focus on closing loopholes, enhancing enforcement and protecting U.S. technological advantages. Recommendations are expected to include measures to prevent the transfer of sensitive goods and technologies, with particular attention likely on semiconductors and other critical technologies.

Outbound Investment
The Secretary of the Treasury, in consultation with the Secretary of Commerce and other relevant agencies, will review whether Executive Order (EO) 14105, issued on August 9, 2023, should be modified, rescinded or replaced. This EO initiated the development of a regulatory framework to monitor and, when necessary, restrict U.S. investments in countries of concern, specifically China, Hong Kong and Macau. The U.S. Department of the Treasury issued the Final Rule implementing this framework on October 28, 2024, which became effective on January 2, 2025.

The review will assess whether the Final Rule provides adequate controls to mitigate national security threats and may include recommendations to strengthen the Outbound Investment Security Program. Notably, Congress is also considering additional measures to regulate outbound investments, reflecting a broader governmental effort to address potential risks associated with U.S. investments in critical technologies abroad.

Artificial Intelligence
On January 20, 2025, President Trump rescinded EO 14110, titled “Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence,” which had been issued by President Biden on October 30, 2023. This EO had laid the groundwork for comprehensive federal oversight of artificial intelligence (AI), emphasizing safety, equity, privacy and national security in AI’s development and deployment. Key provisions included promoting standards for evaluating AI systems’ risks, including dual-use technologies, and creating testing environments for safety evaluations, among other things. The revocation by President Trump reflects a shift in policy focus towards deregulation and minimizing governmental oversight in AI innovation and development.

Economic and Trade Relations with China
Following in the Biden administration’s footsteps, the Trump administration has identified a number of areas of national security risk associated with the People’s Republic of China (PRC). As outlined in the America First Trade Policy, this includes the following:

• Review of the U.S.-China Economic and Trade Agreement: The USTR will assess whether China is fulfilling its obligations under the Economic and Trade Agreement and recommend actions, including tariffs or other measures.
• Permanent Normal Trade Relations (PNTR): The Secretary of Commerce and the USTR will evaluate legislative proposals related to China’s PNTR status and provide recommendations on potential changes.
• Intellectual Property Rights (IPR): The Secretary of Commerce will review U.S. intellectual property rights granted to PRC entities and propose measures to ensure balanced and reciprocal protections.
• Fentanyl and Migration Issues: The secretaries of Commerce and Homeland Security will assess China’s role in unlawful fentanyl flows and migration issues and recommend trade and national security measures to combat risks in either area.

Trade Agreements
The USTR, in consultation with other executive agencies, will review U.S. trade and sectoral agreements to ensure they provide reciprocal and mutually advantageous concessions with partner countries. Key initiatives include:

• USMCA Review: Public consultations will begin under Title 19, Section 4611(b), ahead of the scheduled 2026 review. This process will assess the USMCA’s impact on American industries and recommend adjustments.
• WTO and Procurement Agreements: The USTR will review the impact of trade agreements, including the WTO Agreement on Government Procurement, to ensure alignment with federal policies prioritizing domestic manufacturing.

Connected Vehicles
The Secretary of Commerce has been directed to review and propose appropriate actions regarding rulemaking by the Office of Information and Communication Technology and Services (ICTS) concerning connected vehicles. This review will also evaluate whether ICTS transaction controls should be expanded to encompass additional connected products beyond vehicles. This follows actions by the Biden administration finalizing restrictions on the same matter on January 16, 2025.

II. SANCTIONS

The administration has taken swift action to reorient U.S. sanctions policy, reversing prior decisions and introducing new measures:

• Cuba: In the final week of his term, President Biden rescinded Cuba’s designation as a State Sponsor of Terrorism. President Trump has reversed this decision, and re-designated Cuba. The action is largely symbolic as the U.S. embargo against Cuba has continued to remain in place.
• International Criminal Court (ICC): Penalties against ICC personnel have been reinstated through the reversal of EO 14022, issued by President Biden. This action renews the administration’s opposition to the court’s jurisdiction over U.S. personnel and allies.
• West Bank: Sanctions targeting individuals and entities engaged in certain activities in the West Bank, originally imposed under President Biden’s EO 14115, have been rescinded. This action removes sanctions on persons previously designated under the order. However, a number of these entities remain designated by the European Union and United Kingdom. This type of divergence must be kept in mind going forward for similar situations.

On January 20, 2025, President Trump issued an EO designating certain international drug cartels and transnational organizations as Foreign Terrorist Organizations (FTOs) and Specially Designated Global Terrorists (SDGTs). This order targets groups such as La Mara Salvatrucha (MS-13) and Tren de Aragua (TdA), which are implicated in widespread violence, drug trafficking, and destabilizing activities across the Western Hemisphere.

The EO declares a national emergency to address the threats posed by these organizations, citing their involvement in activities that jeopardize U.S. national security, foreign policy and economic stability. Within 14 days, the Secretary of State, in consultation with Department of the Treasury, Secretary of Homeland Security, Attorney General and the Director of National Intelligence, must recommend specific cartels and organizations for designation under the order. Within the same 14-day period, the Secretary of Homeland Security and Attorney General, in consultation with the Secretary of State, must make operational preparations to implement the Alien Enemies Act to qualify any existing invasion or predatory incursion against the United States by implicated actors, preparing facilities necessary to deport those designated under this order.

Looking Ahead
President Trump’s initial measures reflect a dramatic reorientation of U.S. trade and foreign policy. Businesses should prepare for heightened compliance obligations and rapidly evolving regulatory landscapes. Our real-time alerts on forthcoming trade measures are available on our blog, the Pillsbury Global Trade & Sanctions Law Blog. Please find our coverage of the new administration here.