Trump Administration’s Trade & Tariff Policy

President Trump has been clear that tariffs will be a policy cornerstone of his second administration. Whether being used as leverage to extract policy concessions or to address true bilateral trade imbalances, the threat of across-the-board tariffs marks a stark departure from the traditional U.S. “free trade” philosophy.

Trump’s initial executive actions on inauguration day notably did not include any new tariffs on foreign nations as many had expected, but instead set forth an “America First Trade Policy” directive that establishes a baseline for future tariffs. President Trump threatened 25 percent tariffs on Canada and Mexico and 10 percent tariffs on China as soon as February 1. Additional tariffs may be possible after that date, specifically post-April 1, when many U.S. government agencies are set to report their investigative findings up to the White House in-line with the inauguration day executive orders. Expect that new deadlines, in line with other White House driven directives, may unexpectedly arise over the course of the next few months.

Of high interest to global business community and North American trading partners is the question of what authorities the President may invoke when imposing new tariffs. In his first term, Trump 45 opted to levy tariffs under Sections 301 and 232, both of which are decades old statutes that prescribe a number of due process requirements before any tariffs may go in to effect. It appears increasingly likely that Trump may seek a more unilateral approach in his 47th administration.

One such option that the President is considering is the International Emergency Economic Powers Act (IEEPA). The use of IEEPA, which has not previously been used as a basis to impose tariffs, may raise significant legal questions. Trump’s inclination to explore the use of IEEPA has already been illustrated, using the authority in his first week to declare separate national emergencies related to the southern border and domestic energy production. It is not entirely clear at this point in time what implications the use of IEEPA may have on due process for interested parties seeking exclusions or exemptions from new tariffs.

Further complicating matters, specifically with regard to our southern and northern neighbors, is the looming renegotiation trigger for the US-Mexico-Canada free trade agreement (USMCA), which is on the horizon for July 2026. Buried in Trump’s day-one trade executive order are instructions to the U.S. Trade Representative (USTR) to report on and make recommendations regarding the United States’ participation in the trilateral pact, as well as a requirement that the USTR begin the public consultation process that has historically preceded the negotiation of a new trade pact. The direction to the USTR to take these steps now indicates that the Trump administration may be setting up an early review of the USMCA, with the hopes of garnering additional concessions for the United States.

Separately, but not unrelated, will be unilateral actions that the administration considers related to national security. Expect that Trump’s team will become increasingly aggressive in utilizing both existing (and potentially new) tools to combat national security concerns, such as economic sanctions, export controls, outbound investment review regimes and CFIUS.

What’s Next?

The Trump administration’s aggressive posture toward international trade coupled with the President’s desire to use tariffs as a tool of leverage all add up to a recipe for tariff uncertainty, as evidenced by the President’s recent threats to impose tariffs on Colombian imports over their initial refusal to accept migrant repatriation flights.

While the date certain for new tariffs is not entirely clear, it seems likely that import tariffs could be imposed or adjusted with little to no notice moving forward, making it critical for all businesses with a vested interest in cross-border commerce – particularly those with supply chains in Canada or Mexico – to take stock of their potential exposure and remain nimble to shift as needed. What may begin as baseline, across-the-board tariffs may become industry focused tariffs based on substantive arguments to the administration. Further, robust and aggressive administration engagement will be paramount for all parties with interests in international trade and global supply chains. The Cozen O’Connor Public Strategies team is here to help and serve as your guide in Washington.

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