As feared, Donald Trump did not impose new trade tariffs on the first day of his second term, but the US president did lay out an official blueprint for an “America First trade policy.”
A presidential memo calls on federal agencies to correct “unfair trade practices” and identify “currency manipulators.” Trade deals with China, Canada, Mexico and all other partners are under review.
The message: The Trump administration is prepared to use all means to redesign trade flows in its favor. Here are five key takeaways from the start of Trump’s trade agenda.
Firm commitment to “tariffs sooner rather than later”
Trump mentioned tariffs only three times in his inauguration speech, reassuring investors and trading partners who had been warned of “day one” tariffs. But he did outline plans to create an Internal Revenue Service to collect tariffs, indicating serious plans to increase trade revenue.
Josh Lipsky, senior director of the Atlantic Council think tank, said the tariff decision may be delayed but will not be abandoned. “The president is worried about the market reaction on Tuesday and he doesn’t want that to affect his first day in office.”
The president’s “America First” memorandum provides a framework for the new agenda, announcing a series of reviews of unfair trade practices, the causes of the U.S. trade deficit and whether competitors are manipulating currencies and unfairly taxing U.S. businesses.
Trump has also stepped up his rhetoric, repeatedly threatening to impose 25% tariffs on imports from Canada and Mexico despite the two countries’ free trade agreements. Asked about the prospect of imposing widespread tariffs on anyone doing business with the United States, the president said: “We can. But we’re not ready for that.
“The experience of the first term is that tariffs should be implemented sooner rather than later,” Lipsky warned, adding that the administration has not yet assembled a full economic team and hopes to establish a solid legal basis for any moves.
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Focus on your neighbors first
Trump appeared to prioritize taking action against America’s closest trading partners, saying he was preparing to impose tariffs on Canada and Mexico that would take effect as soon as February 1.
Trump did not hesitate to attack U.S. allies during his first term, imposing tariffs on steel and aluminum imports on national security grounds. But analysts say that by representing Canada so publicly, he is sending a signal that no country is immune to the threat of the self-proclaimed “Tariff Man.”
Trump’s trade memorandum calls for a review of trade relations with Canada and Mexico by April 1 (a later date for Trump’s tariff warning, which the president has not explained). Subsequently, preparations will begin in July 2026 for a comprehensive review of the USMCA trade agreement.
One of the priorities highlighted in the trade memo is Trump’s determination to reduce “illegal immigration and the flow of fentanyl,” particularly from Mexico and Canada.
U.S. manufacturers, especially automakers, rely on business from the three countries for many of their supply chains and may pressure Trump to withdraw his threats.
On Tuesday, Canadian Prime Minister Justin Trudeau said Canada was taking Trump’s proposals “seriously” and would respond if tariffs were imposed, while Mexican President Claudia Scheinbaum said it would focus on “Laws, not words.”
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Systemic reforms, including for China
Other parts of the president’s policy cover the means to achieve a sweeping shift in Washington’s dealings with its trading partners.
“I don’t expect a profit adjustment,” said Kelly Ann Shaw, a partner at law firm Hogan Lovells and a former trade adviser to Trump. “It’s about a whole set of trade and Economic tools are reviewed so that significant action can be taken.”
The memo set in motion a wide range of measures, including an investigation into currency manipulation. Trump has previously accused China of undervaluing the yuan to increase the value of its exports.
The president has also directed his trade representative, Jamieson Greer, to review U.S. trade deals, including a limited deal struck during Trump’s first administration to boost exports to China.
Several sections of the memo direct U.S. economic officials to examine the U.S. economic relationship with China more broadly, including a review of existing tariffs on Chinese goods.
Greer was also asked to identify new agreements that could provide important market access for “American workers, farmers, ranchers, service providers and other businesses,” a sign that a second Trump administration may be willing to forge new trade deals.
“This is a pretty big deal. It makes me think that Congress is going to have a trade bill at some point,” said Everett Eisens, a partner at Squire Barton Boggs in Washington. Tate said. “Once trade bills start changing, they tend to be very significant and regulations don’t change very often.”
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Weaponizing trade to achieve different ends
In addition to reducing the trade deficit, Trump has linked tariffs to other policy goals.
He promised to impose tariffs on EU products unless EU members buy more US oil and gas. Trump also said on Monday that imposing tariffs on China could depend on an agreement on TikTok ownership. He said he would impose tariffs of up to 100% on Chinese imports if Beijing failed to agree on a deal to sell at least 50% of the apps to a U.S. company.
Anahita Thomas, head of international trade at German law firm Baker McKenzie, said Trump is using the threat of tariffs to maximize his influence.
“I don’t think he’s bluffing but using it as a negotiating tool,” she said. Now “each country will know what concessions must be made to maintain good relations”.
These threats can bring collateral damage. “Tariffs will cause inflation,” Thomas said, adding that Trump would not “want to do something that would have a negative impact on inflation.”
“Global” Tariffs and Global Impact
During Trump’s first term, U.S. imports from countries such as Vietnam and Mexico increased. This reflects a trend of Chinese manufacturers seeking to bypass U.S. tariffs by exporting to third countries.
Trump’s trade team is aware of this. His memo called on Greer to consider additional tariff changes to address “circumvention through third countries.”
The memo asked officials to consider whether “global supplemental tariffs” could be used to cover the U.S.’s “large and persistent” annual trade deficit. That suggests measures similar to the widespread tariffs Trump promised during the campaign may still be on the horizon.
His threats could also spur other countries to increase trade with each other. Just last December, the EU reached an agreement with the Mercosur group composed of South American countries and Mexico, and at the same time restarted negotiations with Malaysia after more than ten years.
Malaysian Prime Minister Anwar Ibrahim told the Financial Times in an interview that the global trading system would survive the “initial shock” of Trump’s trade barriers.
