America First Trade Policy

January 20, 2025

The US administration has issued a memorandum outlining the America First Trade Policy.

Key Points:

• Investigation of Trade Deficits: The Secretary of Commerce, in consultation with the Secretary of the Treasury and the US Trade Representative, is tasked with investigating the causes of the United States' persistent trade deficits in goods. This includes assessing economic and national security implications and recommending measures such as a global supplemental tariff to address these deficits.

• Establishment of External Revenue Service (ERS): The Secretary of the Treasury, alongside the Secretaries of Commerce and Homeland Security, will explore the feasibility of creating an ERS dedicated to collecting tariffs, duties, and other trade-related revenues.

• Review of Unfair Trade Practices: The US Trade Representative, in collaboration with relevant departments, will identify unfair trade practices by other nations and suggest appropriate remedial actions under existing US laws and international agreements.

• Assessment of USMCA: A review of the United States-Mexico-Canada Agreement (USMCA) is mandated, focusing on its impact on American workers, farmers, and businesses. This includes preparing for the scheduled 2026 review and considering the United States' continued participation in the agreement.

• Currency Practices Evaluation: The Secretary of the Treasury will assess the currency policies of major US trading partners to identify any manipulation or misalignment that offers unfair competitive advantages. Recommendations will be made to counter such practices, including the designation of certain countries as currency manipulators.

Implications:

• Operational Adjustments: Businesses engaged in international trade may need to adapt to new tariffs or trade policies resulting from these investigations and reviews.

• Regulatory Compliance: Companies should prepare for potential changes in trade regulations, including the establishment of the ERS, which could affect the process of tariff and duty payments.

• Market Strategy Revisions: Firms operating in markets covered by the USMCA or those dealing with countries identified for unfair trade or currency practices might need to reassess their market strategies and supply chain logistics.

Further Actions:

• Stay Informed: Businesses should monitor updates from the Department of Commerce, the Treasury, and the US Trade Representative regarding investigations and policy changes.

• Evaluate Impact: Conduct internal assessments to understand how potential tariffs or changes in trade agreements could affect operations and financial performance.

• Engage in Advocacy: Consider participating in public consultations or industry groups to voice concerns or support for proposed trade measures.

Frequently Asked Questions (FAQ)

1. Which industries are most affected by this policy?
   Industries heavily involved in international trade, such as manufacturing, agriculture, and technology, may be significantly impacted, especially those reliant on imports or exports subject to new tariffs or trade agreements.

2. What immediate actions should businesses take to comply?
   Businesses should conduct a thorough review of their trade practices, consult with legal and trade experts, and monitor government announcements for further details.

3. Are there penalties for non-compliance?
   Potential penalties may include fines, trade restrictions, or additional scrutiny from regulatory authorities.

4. How does this policy impact existing trade agreements?
   The policy may lead to renegotiations or adjustments in existing trade agreements to align with the administration's objectives.

5. Where can businesses find official guidance?
   Official guidance can be found on government websites such as the US Trade Representative's office, the Department of Commerce, and the Treasury Department.