In response to the Donald Trump administration’s second-term tariffs, Canada, China, Mexico, and the European Union (EU)—the United States’ largest trade partners—have announced or threatened retaliatory tariffs.

How do retaliatory tariffs work?

A tariff is a tax on foreign-made goods, which makes them more expensive to import. To get a better idea of how retaliatory tariffs could affect the United States, let’s look at what happened to American soybean farmers during Trump’s first term. Soybeans are the United States’ largest agricultural export to China.

In 2017, U.S. soybean exports to China totaled $12 billion, near an all-time high. Then in 2018, the United States placed tariffs on $34 billion worth of Chinese non-agricultural goods, and China retaliated with tariffs on U.S. soybeans and other products. Soybean exports to China plummeted, with U.S. farmers suffering substantial losses.

U.S. farmers’ losses were Brazilian farmers’ gains. Brazil, the world’s leading soybean producer, increased soybean exports to China and has remained its top supplier.

U.S. soybean exports to China recovered after the two countries signed a trade deal in 2020 but have declined somewhat in recent years as China has sought to become less reliant on imported soy.

From 2018 to 2019, U.S. farmers suffered $26 billion in losses due to China’s retaliatory tariffs. In response, the Trump administration provided $28 billion in bailouts to farmers across the two years…

…How could these retaliatory tariffs hurt the United States?

U.S. exports, specifically from the agriculture and livestock sectors, will decline in the short term as trade partners reduce their imports. U.S. producers will suffer from decreased revenue—as U.S. soybean farmers did during the 2018–19 trade war—while other countries will seek to fill the gap left by the United States. Soybean farmers have still not fully regained their market share of soybean exports to China.

Retaliatory tariffs could also result in an escalation of existing U.S. tariffs, hurting consumers as businesses pass on the costs of tariffs in the form of higher prices. The average U.S. household is already expected to face a cost increase of more than $1,200 per year as a result of existing U.S. tariffs. The imposition of retaliatory tariffs also raises other concerns, including the potential effects on the U.S. stock market and allies’ declining trust in U.S. economic leadership.

Read the Full Article Here

03/21/2025 | Christopher Shim & Will Merrow | Council on Foreign Relations

Brussels Hold’em: European Cards Against Trumpian Coercion

At the card table

“The European Union”, posted Donald Trump on his Truth Social account on March 13th, is “one of the most hostile and abusive taxing and tariffing authorities in the world”. For good measure, the US president added that the EU “was formed for the sole purpose of taking advantage of the United States”. The broadside was just the latest reminder that his administration’s trade wars against Canada, China and Mexico are heading Europe’s way, too. Already its 25% levy on steel and aluminium imports has hit the EU. At the time of writing, there appears to be a significant chance of Trump going far beyond these with sweeping multi-sectoral tariffs.

This is part of a wider story. The second Trump administration has challenged Europe’s territorial sovereignty (by threatening to annex Greenland), its digital model (by attacking its technology regulations), and its traditional political party systems (by courting radical European political forces). The president’s approach to America’s supposed allies on the continent evokes less a sober “strategic rebalancing” than the Ming dynasty’s tributary system, with European leaders expected to kowtow to the emperor in Washington. Trump also appears inclined to pressure Ukraine and its European backers into a peace deal favourable to Russia, and to withdraw significant parts of America’s security commitments on the continent.

The president has implicitly revealed why he thinks he can push Europe around like this. In a comment during his hectoring encounter with Volodymyr Zelensky in the White House on February 28th, Trump told his Ukrainian counterpart: “You don’t have the cards.” Cards are Trump’s euphemism for power and leverage. And to the extent that the American president is capable of threatening Europe across a series of fronts, this is a function of the cards he holds and his willingness to play them aggressively. In other words: Trump seeks to exploit Europe’s economic, technological, political and security vulnerabilities for coercive ends.

Europeans need to learn quickly how to play cards. They must assess the hand they have—Europe’s own sources of leverage over Trump and Trump’s America—and how to strengthen that hand. They must develop a clear and realistic plan of what they want to achieve in the transatlantic game of poker that is likely only just beginning. Where do they want to remain aligned with the US? Where do they want to rebalance the relationship? And where do they want to break from America? Then, Europeans will need to play their hand cannily in pursuit of those ends.

The first step in this process is to review that European hand of cards, what it would mean to play them and how Europeans should proceed with such decision making. Providing that review is the purpose of this policy brief.

Read the Full Policy Brief Here

03/20/2025 | Tobias Gehrke | European Council on Foreign Relations

How U.S. Tariffs on China Might Bolster Other Asian Economies

Trump has pledged far-reaching tariffs on Chinese imports, promising upwards of 60 percent on its goods. He has falsely claimed that these tariffs would punish Chinese manufacturing, but in reality, tariffs are often felt by the consumer.

Businesses and individual consumers are already stockpiling and preparing for increased prices, but once these tariffs are underway, where will manufacturing go? Many Chinese businesses are turning to neighboring regions. They now stand to gain major economic advantages if President Trump’s promised tariffs are implemented.

Tariffs are Taxes

While Trump has often said that tariffs are paid by the foreign manufacturer, that is not the case. A tariff is simply a tax on goods manufactured abroad. To simplify, under Trump’s plan, a Chinese product priced at $100 would face a 60 percent tariff upon arrival at the U.S. border. This means the American company receiving the product pays $60 to the U.S. Treasury. Thus, China receives $100 for the product, the U.S. government gets $60 for the tariff, and the business pays $160 total.

Companies then have a choice—they can pay the cost of the tariff and keep prices for consumers the same, increase the price by a percentage of the tariff to make some of the money back, or increase the price enough to cover the entire cost of the tariff. More often than not, they increase the cost to cover part, if not all, of the tariff.

In addition to the unintended consequences Trump’s tariffs will have on domestic consumers, his policies may also impact the economies of countries surrounding China. As American companies weigh their options for domestic or foreign manufacturing, Vietnam, Malaysia, and Kazakhstan stand to gain significantly if further tariffs are imposed on China.

The Impact on China and Surrounding Countries

Beijing’s response to trade shocks has been bolstered in recent years by implementing proportionate tariff increases and building relationships with surrounding nations. While the Chinese government tries to mitigate any potential impacts of the tariffs, many Chinese companies seek to set up shop elsewhere. This could have the intended consequence Trump is ultimately hoping for: to weaken China’s economy. But with Chinese businesses hoping to move away, countries like Vietnam, Malaysia, and Kazakhstan have a lot to gain by welcoming them with open arms.

Vietnam seems the most likely relocation for Chinese business given their positive trade relations with the U.S. The U.S.-Vietnam commercial relationship has flourished since the normalization of ties in the mid-1990s, making the U.S. Vietnam’s largest export market and a key source of foreign investment. Economic reforms (Doi Moi, in Vietnam) and Vietnam’s integration into global markets, marked by its entry into the World Trade Organization (WTO) in 2007, have driven remarkable progress—bilateral trade has surged from $2.9 billion in 2002 to over $139 billion in 2022. Vietnam is a rising star among Asia’s economies as it benefits from shifting global supply chains. It also stands as a growing market for U.S. agricultural exports, solidifying its role in regional trade and investment opportunities. Vietnam’s manufacturing wing and Chinese businesses have a lot to gain from these transitions.

Read the Full Blog Here

03/25/2025 | Tatyana Masters | The International Affairs Review

TDM Insight: Vietnam Boosts Imports from China

Vietnam Pivots Back to Asia

Vietnam, one of the world’s most dynamic economies, now faces one of its most important challenges of this century as it faces protectionist headwinds and tepid consumer economies in the U.S. and Europe.

So far, its formidable export-based economy has seemed up to the task. In 2024, overall exports rose 14.3% year-to-year to $405.5 billion. The part of that from foreign direct investment increased 12.4% to $289.2 billion.

Vietnam’s coping strategy, according to an analysis by Trade Data Monitor, has been to turn more toward its prosperous ASEAN partners and China. In 2024, Vietnam increased imports from China a whopping 30.2% to $144 billion.

After the first Trump administration imposed hefty tariffs on Chinese imports in 2018, U.S. and Europe-based consumer goods firms moved or shifted parts of their manufacturing supply chains to Vietnam. It was a boon for the formerly war-torn nation, which promptly build a network of new economic zones, deep-water ports, rail lines and roads. After the 2018 duties, Vietnam’s gross domestic product grew by around 8% a year. In 2024, it expanded by 7.1%. A modern economic export miracle.

According to U.S. trade statistics, in 2024 Vietnam had the third biggest trade surplus ($123.5 billion) with the U.S., after only China ($295.4 billion), Mexico ($171.8 billion), and followed by Ireland ($86.7 billion) and Germany ($84.8 billion).

Now as the U.S. faces protectionist sentiment and economic uncertainty, Vietnam must prepare for an adjustment, and it will be essential to diversify export markets. An analysis by TDM suggests that Vietnam possesses the capacity to find new markets for its exports and diversify fruitfully.

The Asian Connection

Vietnam is tightly networked with its Asian neighbors. Seven of the country’s top ten sources of imports are Asian: China, South Korea, the U.S., Japan, Taiwan, Thailand, Indonesia, Malaysia, Australia, and Kuwait.

In 2024, shipments from South Korea nudged up 6.5% to $55.9 billion. By comparison, purchases from the U.S. rose 9.3% to $15.1 billion. Surprisingly, Japan is still the fourth biggest supplier of goods to Vietnam, although it is slipping. In 2024, Vietnam imported $21.6 billion from Japan, down 0.2% compared to 2023. Almost all of Vietnam’s imports from Kuwait were energy-related. In 2024, Vietnam shipped in $7.3 billion, up 23.3% over 2024, from the Middle Eastern nation.

But China was not yet Vietnam’s biggest export market in 2024. That would be the U.S. Vietnam shipped $119.5 billon of goods to the U.S. in 2024, up 23.2% from 2023. China was second, buying $61.2 billion worth of goods, flat compared to 2023. Vietnam’s next biggest exports markets were South Korea, Japan, the Netherlands, Singapore, India, the UK, Germany, and Thailand.

Read the Full Insight Here

03/28/2025 | John W. Miller | Trade Data Monitor

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Since the U.S.-Mexico Canada Agreement entered into force in 2020 during President Trump’s first term, companies in the three countries have re-oriented their supply chains to meet the demands of the agreement.

Recent and potential actions taken by the United States, Canada and Mexico could upend North American supply chains, and have impacts on the North American economy that go beyond just the cost of the tariffs that may be imposed by the three countries.

On Tuesday, March 18, WITA hosted a webinar to discuss the real world impacts of these actions on trade and commerce in North America.

Featured Speakers:

Shannon Fura, Page Fura, P.C., and Immediate Past Chair of the National Association of Foreign Trade Zones.

Turenna Ramírez, Partner, Holland & Knight Mexico SC

Valerie Romero, Executive Vice President, Oremor Automotive Group (Ontario, CA); Chair, American International Automobile Dealers Association (AIADA)

Mark Shiring, CEO, Air Technology/Americas, ebm-papst Group

Laurie Tannous, Vice President Government Relations, Farrow; Chair, Canada US Business Association (CUSBA)

Moderator: Andrew Rudman, Senior Associate (non-resident), CSIS Latin America Program

Watch the Full Event Video Here

03/18/2025 | WITA

Event Video: Setting the Table on National Agriculture Trade Day

On Wednesday, March 19, WITA, the Clayton Yeutter Institute at the University of Nebraska, and the Agriculture Trade Education Council on National Agriculture Trade Day hosted a Zoom webinar on trade and agriculture.

Panelists discussed the current trade landscape and future outlook of U.S. agricultural trade, including its place in relation to the overall U.S. economy, food production, global markets, tariffs and trade barriers, and challenges faced by importers and exporters.

Featured Speakers:

Jordan Dux, Senior Director of National Affairs, Nebraska Farm Bureau

Joseph Glauber, Research Fellow Emeritus, International Food Policy Research Institute

Virginia Houston, Director of Government Affairs, American Soybean Association

Tom Madrecki, Vice President, Supply Chain Resiliency, Consumer Brands Association

Moderator: Darci Vetter, Principal, Sower Strategies, LLC; former Chief Agricultural Negotiator, Office of the U.S. Trade Representative

Watch the Full Event Video Here

03/19/2025 | WITA

What Beijing Wants From a US-China Trade War

Since coming into office, the Trump administration has twice increased tariffs on Chinese imports into the United States by 10%, ostensibly because of China’s outsized role in supplying fentanyl precursors to the United States. Beijing has swiftly responded with a mélange of coordinated retaliatory measures—including imposing export controls on critical minerals, levying tariffs on U.S. agricultural products, putting U.S. companies on China’s unreliable entities list, announcing investigations into other U.S. firms, and filing suit at the World Trade Organization (WTO). Taken together, China’s responses seem designed to demonstrate resolve while not foreclosing the prospect of negotiations with the Trump administration.

What does China want?

As this tit-for-tat cycle continues, the most alarming outcome for Washington is not an escalation that pushes the relationship over the precipice. Beijing does not want that—and more importantly, President Donald Trump, U.S. businesses, and U.S. consumers do not want that either. Counterintuitively, the most dangerous outcome is a negotiation that ends in a “grand bargain” that goes beyond trade issues to encompass technology and security issues. Beijing’s overriding goal is for the United States to stay out of its way as it accrues power, wealth, and influence. In the negotiations that are likely to ensue in this trade war, Beijing would likely have three tiers of issues on which it would seek a rollback of competitive U.S. policies that have been at the heart of both the first Trump administration’s and then the Biden administration’s China policies.

First, Beijing would likely seek to loosen the scrutiny of China’s investments into the United States that intensified during the first Trump administration, and of the restrictions on U.S. investments into China put in place by the Biden administration. Beijing wants to go “back to the future” of the Obama years when two-way foreign direct investment spiked.

Second, Beijing would likely table trade-adjacent issues by seeking a rollback of the technology restrictions that the first Trump administration imposed on China and then the Biden administration expanded and systematized. Even with those restrictions in place, Chinese companies like DeepSeek are still challenging the U.S. lead on crucial technologies like artificial intelligence, demonstrating China’s formidability and resilience as a competitor even in the face of its economic slowdown.

Third, since Beijing’s goal is to get the United States out of China’s way, Beijing could look to make progress on its long-standing objective of undermining U.S. security commitments in the region, especially in contested areas like the Taiwan Strait and the South China Sea. Beijing may calculate that it can appeal to Trump’s enduring suspicion of U.S. security commitments to get him to trade away U.S. pledges to defend partners in return for Chinese promises of future economic actions.

Read the Full Commentary Here

03/12/2025 | Jonathan A. Czin | The Brookings Institution

How a Trade War with China Benefits U.S. Companies

For decades, China has been crucial to U.S. companies, both as a source of revenue growth and as a means of reducing the cost of goods. However, U.S. companies trying to access its growing consumer market have faced trade policies that compelled them to offer concessions and share intellectual property (IP) with local joint venture partners.

As U.S. companies launched programs to move manufacturing to low-wage countries, China-based suppliers became an integral part of their supply chains. While the two powerhouse economies became more interdependent than ever, the U.S. trade deficit grew at a compound annual growth rate of almost 5 percent over the last 20 years. This sustained growth led to a substantial trade imbalance, reaching around US$380 billion per year by the early 2020s.

As U.S. policymakers debate ways to address China’s global political influence, trade with China has become a complex issue involving not just political and national security dimensions but also one that involves the economic interests of large U.S. companies…

…The Role Of Tariffs

In 2018, the Trump administration imposed Section 301 tariffs on approximately $50 billion worth of Chinese imports, targeting sectors like electronics, machinery, aerospace and IT. These tariffs followed a U.S. trade representative investigation that found China guilty of unfair trade practices, including IP theft and forced technology transfers. China retaliated with tariffs on U.S. agricultural products, causing market volatility and uncertainty.

Although politically significant, this tariff escalation was a missed opportunity for the U.S. and China to foster fairer trade practices. Evidence suggests that companies advocating for equitable trade practices, rather than relying on protectionist tariffs, often appear stronger.

Consider Tesla’s experience in China. In 2020, China accounted for approximately 22 percent of Tesla’s global revenue, with the company’s sales growing at a robust 33 percent year over year. However, Tesla’s market share in China dropped from 10 percent to 6.5 percent, largely due to fierce competition from local electric vehicle (EV) manufacturers. Instead of seeking tariff protection, Tesla responded to this competitive pressure by ramping up production of an upgraded Model 3, specifically tailored to the Chinese market.

In the broader context of the U.S.-China trade war, Tesla’s experience highlights a critical point: While tariffs may offer short-term political leverage, a more forward-looking approach prioritizes creating transparent policies that promote fair trade competition and innovation across borders. This would not only help U.S. companies but also contribute to a more stable and prosperous global economy.

Read the Full Article Here

03/17/2025 | Aditya Jain | Institute for Supply Management

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Washington (March 12, 2025) – The Board of Directors of the Washington International Trade Association (WITA) is pleased to announce that it has elected Nasim Fussell as the new Chair of WITA’s Board of Directors. Steve Lamar, the President and CEO of the American Apparel & Footwear Association, who served as WITA’s Board Chair since 2004, will continue to serve as a member of WITA’s Board of Directors.  

“I am incredibly honored to step into the role of Chair of the WITA Board of Directors. Steve Lamar’s leadership has been instrumental in shaping WITA into a premier forum for trade dialogue and policy discussion,” said Nasim. “Steve has been a mentor and friend to so many of us in the trade community, generously sharing his insight and guidance over the years. I look forward to building on the strong foundation laid by Steve, and continuing to advance WITA’s mission to provide a neutral forum for the open and robust discussion of international trade policy.”

Nasim Fussell, WITA’s new Chair, is a Senior Vice President at Lot Sixteen, where she leads the firm’s trade practice. On Capitol Hill, Nasim served as the Chief International Trade Counsel for the Senate Finance Committee under Chairman Chuck Grassley and Deputy Chief International Trade Counsel under Chairman Hatch, as well as Trade Counsel to the House Ways and Means Committee, where she worked for Chairmen Brady, Ryan, and Camp. 

“Our whole team is excited to work with Nasim, and we are confident that she will be a worthy successor to all those whose leadership helped build the organization,” said Kenneth Levinson, WITA’s Chief Executive Officer. “Steve has been a tremendous leader in three transformational phases of WITAs growth,” continued Ken. “Steve oversaw the institutional development of WITA in the 2000s; the rapid growth of WITA’s membership in the 2010s; and its transition to a global platform for trade education in the 2020s.”

“Nasim has been an incredibly valuable member of WITA’s Board of Directors, and her accession to the Chair is a fantastic development that helps power WITA into the future by tapping into the next generation of leadership,” said Steve Lamar, WITA’s former Chair. “I look forward to working with Nasim and the Board as we help Ken and his team continue WITA’s incredible evolution.”

In addition to her roles in the U.S. Congress, Nasim has also worked in the private sector as a law firm partner, in-house with two multinational companies, and a trade association. She started her career at the U.S. Department of Commerce. She holds an LLM in International & Comparative Law from George Washington Law School, a JD from the University of Baltimore School of Law, and a BA in History from the University of Michigan.

Read the Full Press Release Here

03/12/2025 | WITA

Event Video: Driving Health, Innovation, and Economic Opportunity Through Data and [International] Trade

Global commerce depends on the ability to use information and communication technology (ICT) networks and the Internet to conduct business across borders. Cross-border data transfers are essential to innovation, US jobs, exports, and business in the agriculture, automotive, aerospace, finance, health, media, software, and telecommunications sectors, among others.

On Friday, March 14, WITA hosted a webinar to examine efforts to create a predictable and stable international framework to ensure the secure and responsible movement of information across borders.

Featured Speakers:

Stephen Claeys, Senior Director, Global Trade Policy, Pfizer

Josh Kallmer, Head of Global Public Policy and Government Relations, Zoom Communications, Inc.

Marta Prado, Director, Global Government Engagement, Visa

Andrew Wayne, Managing Director, Digital, Tax & Trade Policy, Siemens U.S. Government Affairs

Moderator: Nigel Cory, Director, Crowell Global Advisors

Watch the Full Event Video Here

03/14/2025 | WITA

The Trade Imbalance Index: Where the Trump Administration Should Take Action to Address Trade Distortions

As the Trump administration seeks to rebalance America’s trade relationships, it should focus the most attention on countries where U.S. industries face the worst trade distortions and imbalances, and where the greatest gains can be achieved for the U.S. economy. China, India, and the European Union top that list.

Key Takeaways

• The White House has given the Office of the U.S. Trade Representative, along with the departments of Treasury and Commerce, until April 1 to identify countries the administration should confront with corrective trade actions.
• It would be a mistake for the Trump administration to impose across-the-board tariffs on all nations, even if some run trade surpluses with America.
• The administration should focus on the nations that employ the most extensive arrays of unfair trade practices, including behind-the-border restrictions that specifically target U.S. companies or exports.
• Based on an index composed of 11 indicators covering America’s trade balances and key barriers U.S. industries face in markets around world, the administration should focus the greatest attention on China, India, and the European Union.
• While it is highly unlikely that tariffs or other pressure can convince China to reduce its trade distortions, such measures might work vis-à-vis U.S. relations with other nations.

Introduction

The second Trump administration has taken office looking to put U.S. trade relations on a more equitable footing with the rest of the world. President Trump has railed that other nations “are taking advantage of us” and vowed to ensure that U.S. companies are treated fairly in international markets. As Secretary of State Marco Rubio recently told U.S. allies, “I know you’ve gotten used to a foreign policy in which you act in the national interest of your country, and we sort of act in the interest of the globe or global order. But we are led by a different person now.”

To enact the president’s vision, the White House has instructed the Office of the United States Trade Representative (USTR), in coordination with the departments of Commerce and Treasury, to identify “any unfair trade practices by other countries and recommend appropriate actions to remedy such practices” by April 1, 2025.

Meanwhile, the president has already trained his fire at several nations in the opening weeks of his administration—notably Canada, China, Colombia, and Mexico—but the to-do list is long, as an increasing number of countries around the world have adopted mercantilist trade practices in recent decades. Against that backdrop, the administration should focus on countries where systematically unfair, mercantilist trade policies are inflicting the most significant damage on the U.S. economy and U.S. corporations (large and small alike), and where the United States stands to gain the most by restoring balanced trade. Accordingly, the Information Technology and Innovation Foundation (ITIF) has developed the “Trade Imbalance Index” described in this report. It evaluates 48 countries (15 of which are included in the “European Union” bloc) on 11 measures to ascertain which are the biggest trade mercantilists or scofflaws and where the Trump administration should concentrate its attention as it seeks to advance a trade policy that more effectively defends U.S. interests and ensures more balanced trade relations.

Read the Full Report Here

03/10/2025 | Stephen Ezell, Trelysa Long & Robert D. Atkinson |

Information Technology & Innovation Foundation

The U.S. Tariff Threat Could Break Canada—Or Be a Blessing in Disguise

If Donald Trump’s tariffs remain mostly a threat, or are quickly resolved once they are in fact implemented, this tiff may counterintuitively have the potential to be one of the best things that has happened for Canadian prosperity and unity in a long time.

The visceral reaction to President Trump’s threat of so-called “economic warfare” has forced Canadians to take a hard look at our productivity challenges in general and high dependence on the U.S. market in particular. This has already generated political commitments from nearly every corner to break out of the malaise that has held us back from realizing our potential.

Following through could save Canada from economic devastation and boost our sovereignty; failing to make meaningful changes like those listed below will not only harm us but also risks fracturing the federation.

Premiers are committing to break down internal trade barriers, which is certainly overdue and could boost our GDP by billions. Economist Trevor Tombe has estimated the boost from eliminating them entirely could be higher than the 3 to 4 percent GDP contraction expected if the tariffs do materialize. Despite the sharp change in tone from our premiers, however, we should not expect all the jurisdictional turf involved in these provincial barriers to be ceded.

Fortunately, there has been a strong shift in tone in another critical area: streamlining regulations on major infrastructure projects that extract our resources and transport them east-west.

Across the political spectrum, and even in Quebec, there is suddenly a great deal of life in what seemed a moribund area of economic opportunity. As politicians and their economic advisors now desperately scan Canadian industries for means of boosting our productivity, hostile policies holding back resources—especially oil and gas—stand out.

Read the Full Commentary Here

03/12/2025 | Bill Bewick | The Hub

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U.S. trade policy has become a storm of unpredictability, leaving customs brokers scrambling to stay on top of ever-changing tariffs and rules. This has put global supply chain operators on their heels, trying to react, remain compliant, and keep freight moving.

Historically, the Customs and Border Protection (CBP) agency offered long lead times and clear guidance when implementing new regulations, allowing stakeholders to prepare and adapt. But recently, that pattern has shifted drastically. Instead of months or even weeks of preparation, new rules and changes are getting announced, often with just days of notice, and in some cases, rescinded after brief implementation periods. The result is chaos.

The impacts are immediate and far-reaching. The constant barrage of updates — such as tariff changes, new de minimis rules, and complex HTS (Harmonized Tariff Schedule) associations — has pushed customs workloads to the breaking point…

…The Unlimited Pool of AI “Workers”

Amid this chaos, AI is emerging as a crucial tool to streamline operations and mitigate the impacts of regulatory changes. While AI can’t replace a broker’s expertise, it can handle redundant data entry, lookup and processing tasks, which allows human operators to focus on strategic decision-making.

Today’s regulatory environment demands that brokers remain adaptable and up to date. AI technology that integrates directly with transportation management systems or Excel outputs can keep teams informed and ready to act without having to overhaul existing workflows.

AI can quickly identify and apply the most up-to-date HTS codes, and do it within the context of existing workflows, significantly reducing the time spent on manual lookups. Through automated lookup capabilities, AI ensures that the correct tariff information is used, helping brokers avoid costly mistakes and delays.

One of the most time-consuming aspects of the job is data entry. With the shift to more complex HTS code associations and the volume increases, brokers are spending far more time entering data into their systems. AI can help reduce this manual burden by streamlining classification and entry processes, allowing brokers to process more shipments in less time.

By automating routine tasks and ensuring that teams remain agile and adaptable, AI-enabled technology provides much-needed relief for brokers navigating these regulatory shifts, which is why it is one of the more mature business use cases in global logistics today.

Read the Full Blog Here

02/27/2025 | Greg Kefer | SupplyChainBrain

That’s What (Economic) Friends are For: Guiding Principles to Boost Supply Chain Security

The United States has recently pursued “friendshoring” of supply chains to trusted countries in the Indo-Pacific as part of its efforts to reduce dependence on China and make supply chains more resilient to global shocks. Friendshoring initiatives include plurilateral forums such as the Minerals Security Partnership and the Chip 4 Alliance, as well as initiatives to bolster bilateral economic relationships with Indonesia, Vietnam, and India, among other countries.

However, the implementation of U.S. friendshoring policy has met its fair share of challenges, including how potential tariff increases may impact its viability. Moreover, it is not always clear who is a “friend” of the United States, and there is uncertainty about the longevity and durability of the “friendship” classification. In addition, the increase in U.S. policies (and dollars) supporting domestic production – for example, through the 2022 Inflation Reduction Act – seems to be somewhat at odds with the goal of friendshoring to strengthen trusted supply chains. Furthermore, friendshoring policy reinforces trends toward the bifurcation of the global economy along a U.S./China split, contributing to a slowdown in global economic growth.

In interviews with Indo-Pacific experts both inside and outside government, the Asia Society Policy Institute (ASPI) heard that while U.S. engagement in the region is welcome, there are also some frustrations with the friendshoring policy. Interviewees bemoaned the lack of real economic benefits for their countries from initiatives to date and highlighted their disappointment with U.S. policies that subsidize domestic production, especially when they cannot compete with such incentives. The recent political positioning around Nippon Steel’s attempted acquisition of U.S. Steel was cited as undermining trust among friends of the United States. Respondents also emphasized the difficulty of excluding China from their supply chains, with several stressing the importance of balancing ties with China and the United States.

As the new administration considers the future of this policy, ASPI recommends bolstering friendshoring policies by adopting five guiding principles:

1. Strategic focus: Working closely with the private sector, focus friendshoring first on a limited number of strategic sectors in line with U.S. priorities, such as chips, critical minerals, and pharmaceuticals, and expand to other sectors over time.
2. Certainty: Take a long-term approach to building confidence among friends by situating friendshoring policy in a new, comprehensive U.S. economic security strategy. This would provide a clear direction, certainty, and consistency of application for friendshoring policy.
3. Expanding membership: Look beyond traditional partners to include trusted developing economies that will provide greater access to resources and supply networks for businesses.
4. Substantive benefits: Strengthen the benefits of friendshoring for both sides, including gains in market access, collaboration on research and development, and increased support for capacity building.
5. Engagement: Ensure that engagement with trusted partners – and the U.S. business community – goes both ways, creating ample opportunities for early discussion and feedback on new initiatives.

Read the Full Issue Paper Here

03/03/2025 | Jane Mellsop | Asia Society Policy Institute

Trump’s Tariffs – How Should the EU React?

The ‘Fair and Reciprocal Tariff Plan’ proposed by Donald Trump sounds innocuous but is a roadmap towards an all-out global trade war. To avert one, Europe must act firmly and speedily.

On February 13th, the Trump administration presented the Fair and Reciprocal Tariff Plan (FRTP), signalling that it is ready to end the global trading system as we know it. Financial markets greeted the proposal with a shrug, lost in the flurry of Trump’s executive orders. But in terms of consequences for the global economy, it is the most significant and devastating of Trump’s proposals.

What is being proposed?

Because of its name, many have interpreted the FRTP as a mirroring exercise in which the US would match its import tariffs with those faced by US exports in the partner country. The combination of countless products across a wide swathe of trade partners would lead to a huge number of different rates. In fact, such an exercise would be unworkable, as the US would have to manage over 2.6 million different tariff rates, depending on the product and the country. Even if the administrative complexity could be overcome, such a proposal would only raise tariff rates by a very modest amount. Trump’s plan would hit developing countries such as Vietnam and India hardest, since they tend to have higher tariffs. The consequences for Europe would be limited, as the average EU tariff rate on US imports is only half a per cent higher than US tariffs on EU imports. The EU could slightly lower its tariffs to iron out the wrinkle.

The problem is that Trump’s actual proposal is both simpler and more radical. According to White House officials, “the expected result is an individual additional tariff rate for each country or trading partner, rather than attempting to set corresponding tariff rates on every product.” Moreover, instead of just mirroring tariff rates, this overall additional tariff rate would be based on a combination of five factors:

1. Tariffs levied on US imports;
2. Taxes deemed unfair, extraterritorial or discriminatory, including value-added tax (VAT);
3. Non-tariff barriers, harmful policies like subsidies and regulatory requirements that impose costs on US businesses operating abroad;
4. Exchange rate policies that interfere with market values; and
5. Any other practice that interferes with market access or fair competition.

The potential scope of these measures is extraordinarily broad and represents a dramatic attempt to intervene in other countries’ internal regulation and taxation. It would de facto condition access to the US market on trading partners’ compliance with US preferences.

Read the Full Insight Here

02/26/2025 | Aslak Berg | Centre for European Reform

How the US Courts Rewrote the Rules of International Trade

Consider the following two stories involving legal disputes between American companies and foreign governments.

In 1919, the ocean steamer The Pesaro sailed from Genoa, Italy, for New York City. Built in Germany for a German shipper and formerly named the SS Moltke, the steamer had been seized by the Italian government in 1915 after Italy entered World War I. On board for its departure to America four years later were 75 cases of artificial silk owned by a company incorporated and based in the United States called the Berizzi Brothers. When The Pesaro arrived in New York after two weeks at sea, however, the Berizzi Brothers cried foul: Only 74 cases of silk were delivered. One had been lost or damaged in transit.

Eighty-two years later, a dispute on an altogether larger scale began. In 2001, with Argentina’s economy mired in recession, the country defaulted on around $93 billion of government debt, in what was then the largest sovereign debt default in history. Though a portion of that debt was owed to foreign governments, the default primarily involved private bondholders such as institutional investors. Most of these creditors would eventually agree to restructure the debt for cents on the dollar (thus booking losses), but a minority of the debt holders refused to accept this “haircut.” Like the Berizzi Brothers eight decades earlier, these holdouts, too, were based in the United States, namely a group of Wall Street “vulture funds” that had invested in the debt at distressed prices.

Beyond the fact that both cases pitted American firms against foreign governments, what links these stories is that the firms in question sought legal redress for their grievances. Not only that, but they sought this redress specifically in American courts, and thus by appeal to US law. The Berizzi Brothers sued for $250 in damages; the vulture-fund owners of the Argentinian debt sued for full face value plus interest.

The Berizzi Brothers’ case ended up in the US Supreme Court, and in 1926 the company lost, which is to say that the Italian government won. The Pesaro was owned and operated by Italy, and it was well established under US law that foreign governments (and their oceangoing vessels) were immune from suit in domestic courts. Yes, the Italian government was engaged in this case in a commercial activity, but it was so engaged, the court ruled, in a public rather than private capacity and with a public purpose.

But the Argentine government would not prove so fortunate, twice finding itself on the receiving end of negative legal judgments in its battle with the vulture funds. The first was when the US courts decided in 2012 in favor of the creditor holdouts, ruling that the full bond value was indeed due. The second followed Argentina’s subsequent decision—highly unusual among sovereign debtors in recent decades—to stand firm and continue to not pay up. While the US courts could not directly make Argentina pay, they could and did make life extremely uncomfortable, issuing rulings from 2012 to 2014 that indirectly forced the Argentine government’s hand by prohibiting it from making payments to other creditors unless it paid the holdouts first, and by prohibiting anyone anywhere in the world except Argentina from helping the country make such payments.

This pair of legal battles prompts a number of questions: What role does the law play in the arbitration of economic disputes? How does the direct involvement of sovereign states in such disputes affect that legal function? And what difference does it make when legal and economic disputes involving governments spill across national borders? These concerns have once again moved to the fore, with an explicitly protectionist and imperially minded president having taken the reins of power in America. The transition from The Pesaro and silk to Argentinian bonds and American vulture funds is an essential backdrop against which to answer these questions. In the course of eight decades, US courts seemingly made a decisive turn against foreign governments, stacking the deck in favor of American companies and becoming, in the process, a handmaiden to American empire.

Read the Full Article Here

03/03/2025 | Brett Christophers | The Nation

2025 Trade Policy Agenda and 2024 Annual Report of the President of the United States on the Trade Agreements Program

On February 27, the Office of the U.S. Trade Representative published their 2025 Trade Policy Agenda, 2024 Annual Report, and World Trade Organization at Thirty report to Congress.

The agenda lays out the Administration’s vision for trade, describing the economic and national security challenges facing the United States and articulates a plan for rebalancing trade to address those challenges, including the work required by the President’s America First Trade Policy Presidential Memorandum.

The 2024 Annual Report gives a summary of the activities undertaken by the Office of the USTR during the previous year. The WTO at Thirty report assesses U.S. interests at the WTO, in particular describing the challenges facing the institution and the need for reform.

Read the Full Report Here

02/27/2025 | Office of the U.S. Trade Representative

The post WITA’S FRIDAY FOCUS ON TRADE – MARCH 7, 2025 appeared first on WITA.

Changing the Trade and Development Consensus

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The post WITA’s FRIDAY FOCUS ON TRADE – FEB 28, 2025 appeared first on WITA.

It Is All About Trade

Donald Trump Wants Reciprocity in Trade: Here’s a Closer Look

Gauging Business Exposure to Trump’s Emerging Reciprocal Tariff Plans

C.J. Mahoney Joins Security Economics

The post WITA’S FRIDAY FOCUS ON TRADE – FEB 21, 2025 appeared first on WITA.

What Just Happened: New Tariffs on Products
from Mexico, Canada, and China

Toward a Cleaner, Smarter USMCA

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How the US and Europe Can Come Together

Managing the Risks of China’s Access to U.S. Data
& Control of Software & Connected Technology

The post WITA’S FRIDAY FOCUS ON TRADE – FEB 7, 2025 appeared first on WITA.

China’s DeepSeek AI Shakes Up the Game

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The post WITA’S FRIDAY FOCUS ON TRADE – JAN 31, 2025 appeared first on WITA.

On Feb. 3, the leaders of Mexico and Canada each spoke with the president. Following those calls, the Trump administration announced a 30-day suspension of the tariffs on products from Mexico and Canada in light of promises made by each leader (some of which were promises that they had made already in 2024) to shore up their border protection and related efforts.

On Feb. 4, China announced retaliatory measures against the United States in the form of tariffs on certain U.S. products, as well as export controls among other regulatory interventions.

What Has Been the Effect?

The U.S. foreign commerce bureaucracy – in this instance, namely the International Trade Commission and Customs and Border Protection (CBP) – moved swiftly to take steps to arrange to charge importers additional taxes on the goods they bring in to the United States from these three countries, although now only the restrictions related to products from China will remain in place. Products from China will face a 10 percent levy on top of any other tariff to which they would be subject.

If the Trump administration decides to lift the suspension and re-impose the measures on Canada and Mexico, then all products from Mexico and most from Canada will be subject to a 25 percent levy. Energy products from Canada will be subject to a 10 percent levy. (Recall that, as a result of the United States-Mexico-Canada Agreement (USMCA) – the free-trade agreement negotiated by the Trump administration in 2018-2019 – most products presently enter the United States from these two countries with no such charge.)

Customs brokers will need to work with CBP to possibly amend their paperwork regarding these goods in which they estimate their duty liability. Products are likely to continue to flow, but CBP will send importers potentially hefty bills. Perhaps most problematic, or at least challenging to implement, is the president’s effective elimination of the de minimis qualification regarding products from China. CBP has reported that nearly four million de minimis shipments enter the United States on an average day and about two-thirds of those originate in China. The need to review all those shipments will take away from other work, and may require more staff when CBP is already facing a staff shortage.

What is the Legal Basis for These Actions?

President Trump invoked the 1977 International Emergency Economic Powers Act (IEEPA), and relatedly the National Emergencies Act, as the basis for these actions. As Scott Anderson and I discussed the last time the president considered this path for putting tariffs on products from Mexico in 2019, the IEEPA provides the president with certain extraordinary authorities that he may use to “deal with any unusual or extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States, if the President declares a national emergency with respect to such threat.

Although no president has used the IEEPA to introduce tariffs on products from U.S. trading partners before, the IEEPA allows the president to exercise wide-ranging authority. In relevant part, it authorizes the president to:

(A) investigate, regulate, or prohibit—

(i) any transactions in foreign exchange,

(ii) transfers of credit or payments between, by, through, or to any banking institution, to the extent that such transfers or payments involve any interest of any foreign country or a national thereof,

(iii) the importing or exporting of currency or securities … [;] [and]

(B) investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition, holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest ….

Some commentators have argued that the president’s use here of the IEEPA exceeds the bounds of this statutory authority, pointing to the fact that, for example, the IEEPA does not mention explicitly the power to impose duties, among other arguments. But courts have tended to favor the president’s wide discretion under both the IEEPA and similar laws in the past. In the 1970s, a federal appellate court upheld President Richard Nixon’s authority to impose tariffs under a similar law for a limited period of time.

Interestingly, another law, which the president did not invoke, gives the president the authority to impose tariffs specifically to address uncooperative drug-producing and drug-transit countries. This statute, enacted as part of the Trade Act of 1974, allows the president to apply up to 50 percent tariffs to products from any country that is considered a “major drug producing country” or “major drug-transit country.” In September 2024, President Joe Biden determined that Mexico and China qualified as such countries. The availability of this authority may cast doubt on claims that the president has exceeded his delegated powers. For U.S. trading partners, however, premising the tariffs on drug issues on which Canada, Mexico, and the United States were already working together as compared to other thorny problems among the three countries may have made it easier to find common ground on an arrangement that would allow the president to suspend the tariffs.

What Could Happen Next?

CBP has begun to collect these tariffs on products from these China. As of now, there are few exceptions or exclusions. If these tariffs remain in place for an extended period, we may see the business community seek an exclusion process by which companies can at least apply to be exempted from having to pay these border taxes on their products. The first Trump administration set up an exclusion process for the tariffs imposed on products from China (one study has concluded that that process favored politically connected companies over others). No law requires the administration to set up exclusions, nor does any law prohibit it.

Canada, Mexico, and China have also announced that they will commence dispute settlement proceedings at the World Trade Organization (WTO) and, in the case of Mexico and Canada, under the USMCA. In simplest terms, the legal arguments for such proceedings turn on the fact that the United States, as a USMCA party and as a WTO member, has an obligation not to impose discriminatory tariffs on other parties and members. Even if the United States were to lose such a case under the USMCA, the likely remedy for Canada and Mexico would be to impose their own trade-related measures – something they already planned to do. And the WTO dispute settlement system is in a state of disarray such that disputes cannot be resolved absent agreement between the parties to use a special process.

Given the president’s seemingly broad authority under the IEEPA, questions remain about what those opposed to the tariffs – apart from the trading partners themselves — could do to stop their implementation.

Let’s start with the litigation option. An affected importer could file a lawsuit challenging the president’s action along one or more dimensions such as with respect to the nature of the national emergency or the constitutionality of the use of the IEEPA to impose tariffs. The importer’s choice of court would depend on the part of the action that it claims is a violation of the law and on what grounds. Most cases concerning tariff actions are filed at the U.S. Court of International Trade, a specialized federal court based in New York City.

Many of the cases against the Trump and Biden administrations that sought to put a stop to tariffs during the last eight years have been filed in that court. On appeal to the U.S. Court of Appeals for the Federal Circuit, the government has won nearly all the cases that have concluded (some remain pending), but those cases have not involved the IEEPA. We may see a case concerning the tariffs on products from China in the coming days. One might expect an importer to seek a preliminary injunction to put a pause on the implementation of the tariffs as soon as possible, but that is a high bar to meet.

As for Congress, although some members have spoken out in opposition to the tariffs, there is not enough resistance within the legislature for it to intervene. During both the first Trump administration and the Biden administration, members proposed legislation that would retract some of the delegated authority to the president to regulate international commerce, but none of those initiatives gained sufficient traction with respect to the president’s security-premised tariff-raising authority. Now does not seem like the time when the momentum will shift. Without legislation to revise its prior delegations, it would take a veto-proof majority for Congress to intervene in this particular national emergency and tariff action.

In all likelihood, the three governments will continue to negotiate arrangements with the United States to address the president’s concerns such that these tariffs may be lifted or may be more limited than the initial orders suggest. One question remains as to how long that will take, and how long a deal will last. For now, there is supposedly 30 days’ reprieve on the North American disruptions. But there may be others. We know well by now, just two weeks into this administration, that Trump is inclined to threaten and apply tariffs as a means of coercing governments to accede to his wishes on a variety of topics at any time.

To read the article as it was published on the Just Security website, click here.

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