President Donald Trump has ordered a comprehensive review of U.S. trade policies, signaling a potential shift toward tariffs on key trade partners. Federal agencies must deliver findings by April, setting the stage for significant changes to U.S. trade dynamics.
A Strategic Delay, Not a Departure
On January 20, 2025, President Trump signed a memorandum directing federal agencies to assess U.S. trade agreements with Canada, Mexico, and China. The move, which stops short of immediate tariffs, represents a recalibration of Trump’s earlier campaign pledges to impose sweeping tariffs on day one of his presidency.
Instead of the promised 25% tariffs on imports from Canada and Mexico and an additional 10% on Chinese goods, Trump’s memorandum calls for a measured approach. Agencies including the Department of Commerce, the Treasury, and the U.S. Trade Representative (USTR) must evaluate the trade deficit and recommend remedies, such as supplemental tariffs or other measures, by April 1.
Trump’s plan is to revisit trade agreements and assess their fairness to U.S. industries, particularly manufacturing. In his inauguration speech earlier that day, he declared the U.S. trade system “ripe for overhaul,” highlighting tariffs as a tool to protect domestic businesses and generate revenue.
A Broader Trade Policy Agenda
The memorandum also tasks agencies with investigating unfair trade practices by foreign nations, including China, which has been a focal point of Trump’s trade rhetoric. The USTR will determine whether current tariffs on Chinese imports should be raised further to address imbalances.
A unique element of the plan is Trump’s proposal to establish an “external revenue service” dedicated to collecting tariffs, duties, and other trade-related revenues. This initiative would require feasibility studies from the Departments of Treasury, Commerce, and Homeland Security to assess its practicality.
While the announcement falls short of immediate action, it signals Trump’s intention to reshape trade policy as a cornerstone of his administration. His approach aligns with his broader “America First” agenda, emphasizing the revitalization of U.S. manufacturing and a reduced reliance on foreign imports.
Navigating the Policy Crossroads: Turning Trade Shifts into Strategy
Trump’s memorandum highlights a critical juncture for trade and supply chain leaders, not just in terms of tariff mitigation but in redefining long-term strategies. Beyond nearshoring and diversification, leaders should consider leveraging trade shifts to foster innovation. For example, the focus on domestic manufacturing could accelerate investment in advanced production techniques, such as automation and digital twins, to offset rising costs and maintain competitiveness.
Additionally, the potential establishment of an “external revenue service” could create new layers of bureaucracy in global trade, requiring businesses to build compliance frameworks that anticipate regulatory complexity. Leaders would be wise to collaborate with policymakers early, advocating for streamlined processes and clear guidelines to avoid unintended inefficiencies.
More profoundly, the memorandum serves as a reminder that trade strategies must align with broader geopolitical realities. With the U.S. scrutinizing trade with China, companies reliant on Chinese imports should explore partnerships in emerging manufacturing hubs, such as Vietnam or Mexico, while also investing in risk intelligence tools to anticipate and react to policy shifts.
Rather than reacting solely to tariffs, this moment provides an opportunity to adopt a proactive, future-oriented approach that positions supply chains as a strategic asset in navigating the evolving trade landscape.