
The Trump tariffs have arrived: the new administration is set to slap a 25 percent levy on imports from Canada, and an extra 10 percent on goods coming from China, with a planned tariff on Mexico delayed by a month as of Monday. The dramatic move has surprised governments and investors around the world. But the clues this was going to happen have been there since the moment Donald Trump returned to office.

Instead of sweeping tariffs, day one of Trump 2.0 gave us a memo that mostly seemed to buy the new team three more months. But make no mistake: The ambitions veiled in this trade policy document are far-reaching. It provides the clearest indication of a coordinated game plan as the Trump administration searches for the best legal weapons for its desired trade policies.
During his campaign for the White House, Donald Trump repeatedly promised a first day filled with “shock and awe,” particularly around some of his most popular topics like trade and immigration. For trade watchers, the big day came and went not exactly with a bang, but a rather more curiously poker-faced memo called the America First Trade Policy.
President Trump takes questions from the press regarding tariffs, January 31, 2025. Credit: C-SPAN
Trump, of course, tacked back to offensive mode while talking to media later that day, making an apparent off-the-cuff promise to quickly impose tariffs on Canada and Mexico, adding a renewed threat to impose 10 percent tariffs against China, and warning the European Union that tariffs were also in the offing. Over his first weekend, he threatened Colombia with 25 percent tariffs, extracted a settlement, and threw yet more threats again at China, Mexico, and Canada.
While the contents of the memo on Inauguration Day may not have set hearts racing at first glance, the ambitions hidden in this trade policy document are likely to be far-reaching.
Trump is casting about for the right legal weapons to justify a range of his desired trade actions and asking for information from across the government to be delivered to him within a matter of weeks toward this end. The memo provides the clearest indication of a coordinated game plan that is very likely to fundamentally reshape U.S. trade practices in the months and years ahead.

The memo starts blandly. “The Secretary of Commerce, in consultation with the Secretary of the Treasury and the United States Trade Representative, shall investigate the causes of our country’s large and persistent annual trade deficits in goods, as well as the economic and national security implications and risks resulting from such deficits, and recommend appropriate measures, such as a global supplemental tariff or other policies, to remedy such deficits.”

This sentence, however, contains some important clues about the direction of travel. First, it puts the Department of Commerce into the driver’s seat for trade, with the traditional locus of trade policymaking, the U.S. Trade Representative’s Office, now in an advisory role.
Second, it asserts that the U.S. has a large trade deficit which requires a response from Trump. It reaffirms that the focus of Trump 2.0 will be squarely on the trade deficit in goods, without looking into the persistently large global surplus the U.S. maintains in services.
Third, the memo declares that there are both economic and national security risks that come from these goods deficits. Thus, though the memo is asking officials to conduct an investigation, the conclusion of the process is already foreordained — persistent deficits in goods lead directly to economic and security risks.
The America First trade memo foreshadows significant changes in U.S. domestic and foreign policies related to trade. However, as the first Trump administration experience showed, things may not go exactly as planned.
Finally, the sentence directs government agencies to figure out appropriate measures to resolve these challenges. This includes the explicit use of tariffs, which Trump has repeatedly praised as a tool for all manner of challenges the United States faces, but also a potential new approach, a “global supplemental tariff.” This appears to be revised language for Trump’s 10 percent “ring-around-the-collar” tariffs on every country in the world.

The next section flags a new “External Revenue Service (ERS) to collect tariffs, duties, and other foreign trade-related revenues.” This idea had left many trade policy watchers scratching their heads, as it appears to duplicate a key role of U.S. Customs and Border Protection, which has been effectively collecting tariffs and duties at the border since 1789.
There could be two reasons for the creation of an ERS. Trump has repeatedly promised that tariffs will raise substantial revenues. A new institutional approach could make it easier to “count” tariff revenue as an offset against expenditures in the budget to get promised tax cuts and deregulation passed in Congress.

The America First trade document goes on to urge government agencies to use any and all existing legal avenues (including older, often obscure provisions) to address topics such as unfair trade practices; currency manipulation; application of trade rules and remedies like anti-dumping and countervailing duties; export controls; determination of losses from counterfeit and illicit trade including through provisions such as de minimis; adjustment of imports that threaten the national security of the United States (including steel and aluminum); and inbound and outbound investment rules.
Agencies are also instructed to examine the existing U.S. export control system with particular attention to “maintain, obtain, and enhance our Nation’s technological edge and how to identify and eliminate loopholes in existing export controls.” Existing rules, such as those on connected vehicles, should be reconsidered with a view to extending the provisions to include other connected products, the memo says.

The policy memo also includes explicit references to trade partners, with a specific section devoted to trade with China which starts with a review of the Phase One agreement negotiated during Trump’s first term in office. Agencies are directed to identify any gaps and recommend solutions (including the use of tariffs) to respond to instances of non-compliance. A review of ongoing Section 301 also suggests modification of tariffs to remediate damage caused by unfair trade practices.
The China section also includes a request for a new investigation into unreasonable or discriminatory actions taken by China as well as additional scrutiny to “ensure reciprocal and balanced treatment of intellectual property rights with the PRC (People’s Republic of China).”

Finally, the Trump White House is lining up behind Congressional efforts to revoke Permanent Normal Trade Relations (PNTR) with China.
The policy memo only mentions the World Trade Organization (WTO) once, in a section that asks the USTR and Navarro to examine the impact of international agreement provisions, including the WTO, on government procurement with the goal of favoring American companies.
It is not simply that the WTO does not feature prominently in the memo that is striking. It is that many of the planned actions outlined in the document run directly or indirectly counter to many of the rules and provisions of the global trade rule-making institution. From the memo’s opening paragraph calling for supplemental global tariffs to a final paragraph requesting trade and national security adjustments to tackle migration and fentanyl, much of the America First trade agenda is a direct assault on the point of having the WTO.

There has been considerable speculation about whether Trump intends to withdraw the United States from the WTO, as he considered during his first term in office. This memo, however, makes clear that withdrawal may not be necessary. Instead, the U.S. may simply continue to ignore and weaken the institution in other ways.
The America First trade memo foreshadows significant changes in U.S. domestic and foreign policies related to trade. However, as the first Trump administration experience showed, things may not go exactly as planned.
These sweeping adjustments will have a profound impact on global trade. Trump achieved shock and awe, albeit in a veiled debut, on Inauguration Day even without tariff changes.
For a start, this is a complicated set of activities divided across different Executive branch agencies. Coordination and communication will be a challenge, especially as Trump is also making sweeping changes to bureaucratic staffing. The trade memo is not the only executive order signed by Trump in his first days in office that outlines specific tasks for agencies to complete.
There is also tension between Trump’s clear instincts to push for higher tariffs as an all-purpose tool to solve problems and many in his wider orbit who may prefer a more cautious approach to tariffs. For instance, Trump’s Secretary of the Treasury, Scott Bessent, appears inclined to push for more moderate tariffs with a greater emphasis on lower interest rates and reduced fiscal spending. These moves would result in a weaker U.S. dollar to boost competitiveness and create manufacturing jobs at home.
But tariffs are a centerpiece of Trump’s approach, including the use of tariffs to support fiscal balance, serve as a method of threat and punishment against all and sundry in the rest of the world, act as a bargaining chip for different types of negotiation, foster domestic manufacturing, or be a symbol of America First power.
Although tariffs were not actually imposed on Trump’s first day back in the White House, there is very little doubt that he intends to use the power of his administration to the fullest extent to radically alter U.S. trade practices. These sweeping adjustments will have a profound impact on global trade. Trump achieved shock and awe, albeit in a veiled debut, on Inauguration Day even without tariff changes.
Deborah Elms is Head of Trade Policy for the Hinrich Foundation. A longer version of this article was first published by the foundation, and can be read here.

Dr. Deborah Elms is Head of Trade Policy at the Hinrich Foundation in Singapore. Prior to joining the Foundation, she was the Executive Director and Founder of the Asian Trade Centre (ATC). She was also President of the Asia Business Trade Association (ABTA) and the Board Director of the Asian Trade Centre Foundation (ATCF).