Two months ago, Donald Trump took office for his second term as President of the United States, and in just a few weeks, he has managed to reestablish the restrictive trade measures - both tariff and non-tariff - that he had already installed in his first term and that were dismantled by President Biden, generating endless reactions from those most affected.
Thus, first of all and on the same day of the assumption of the new executive, the White House published the document "“America First Trade Policy”, which determines and sets the rules of the game with which this new administration will operate in terms of trade and investments with the rest of the countries, which proposes finding solutions to the problems that this country faces in terms of migration, health, security and sanitation.
Although this document is based on the need to promote the work of Americans, the growth of the economy and national security, the truth is that it promotes trade restrictions, on the one hand, as well as the revision of the instruments that govern preferential trade relations. This starting point will give rise to a series of events and instruments that will weave a network that seems to have no end in the short term and that will directly impact global geopolitics.
Let us see what are the starting points that propose modifications to the global rules promoted by the United States, which can be summarized as follows:
Enero
- publication of the America First Trade Policy: On January 20, the White House, the same day as the presidential inauguration, will publish this document, which is presented as the starting point for the new administration's international and national trade policies. Among other issues, the document promotes:
- Increasing global tariffs and other policies to address unfair and unbalanced trade, in order to remedy such deficits;
- The reform of the tax system in order to design, build and implement an External Revenue Service (ERS) to collect tariffs, duties and other revenues related to foreign trade;
- The review and identification of any unfair trade practices by other countries and recommendation of appropriate actions to remedy such practices.
- The initiation of a public consultation process regarding the United States-Mexico-Canada Agreement (USMCA) in preparation for the review of the USMCA in July 2026;
- The review and evaluation of the policies and practices of the United States' major trading partners with respect to the exchange rate between their currencies and the United States dollar;
- The review of United States trade and sectoral agreements and the recommendation of any revisions that may be necessary or appropriate to achieve or maintain the general level of reciprocal and mutually advantageous concessions with respect to free trade agreement partner countries; among others.
- Imposition of tariffs on Mexico and Canada: Through various Executive Orders, on January 31, Trump announced 25% tariffs on all imports from Mexico and Canada, except for Canadian oil and energy products, which face a 10% tariff.
- Additional tariffs on China: An additional 10% tariff was imposed on Chinese imports, adding to existing tariffs of up to 25% on various Chinese products.
February
- Increase in import tariffs on steel and aluminium regardless of origin: Through the issuance of two new Executive Orders, additional tariffs on steel and aluminum are reestablished, increasing them by 25%, without exceptions. This measure is based on the need to promote the North American national industry. This decision not only impacts Canada, which is its main supplier, and Mexico, but also affects the other suppliers of these materials to the United States, including Argentina and Brazil.
- Temporary suspension of tariffs on Mexico and Canada: The differential tariffs that were to come into effect on February 4, and which would directly affect the automotive, manufacturing and energy sectors in the case of Canada; and the export of auto parts, machinery and medical equipment in the case of Mexico; were postponed for 30 days, due to the reinforcement of immigration and public health policies by those governments.
- New Executive Order Applying Reciprocal Tariffs: This new decision was made on February 14, putting the spotlight on the United States' trade deficit with various trading partners, including the European Union. The measure seeks to increase tariffs to equal the taxes charged by other countries on their imports, especially focusing on VAT, as well as taxes, regulations and other subsidies received by industries.
Responses from those most affected by trade measures
- China's consultations at the World Trade Organization: On February 4, the country requested consultations within the framework of the multilateral trade organization, following the tariff increase. The case “United States – Additional Tariff Measures on Goods from China – Request for Consultations by China” (WT/DS633/1), is based on the incompatibility of the additional tariffs with the Most Favored Nation principle, provided for in Article I of GATT 1994. In addition to the above, this country adopted retaliatory measures, implementing tariffs of 15% on coal and liquefied natural gas, and 10% on American oil and agricultural machinery.
- The European Union speaks out against the United States tariff increase: On February 19, the EU requested time to negotiate in order to avoid a trade war, proposing to work on reciprocal measures to reduce tariffs instead of intensifying protectionist policies. Added to this controversy is the increase in tariffs on steel and aluminum affecting various countries in the Union, and the intervention of the United States in the context of the Russian invasion of Ukraine, without European participation.
- Negotiations in the pipeline for Brazil: This government has expressed its intention to negotiate bilaterally with the United States, as it did previously, by resorting to quotas that allow maintaining export volumes. It should be remembered that this country was the second supplier of steel and iron to the United States in 2024.
- Argentina one of the most affected by tariffs on steel and aluminum: Our country exports within Section XV, Chapter 72 of the Tariff Nomenclature to the United States: Alloy steel, other than stainless steel, in ingots or other primary forms (7224), ferroalloys (7202), waste and scrap, foundry, iron or steel (7204) and raw cast iron and specular cast iron, in ingots, blocks or other primary forms (7201), according to Trade Map data for the year 2024, this country occupying seventh place. For its part, aluminum occupies fourth place in exports to the United States. Within aluminum, Argentina exports raw aluminum; aluminum wire; aluminum manufactures, tanks, barrels, drums, drums, canisters, boxes and similar aluminum containers; aluminum sheets and strips; thin aluminum sheets and strips, aluminum bars and profiles; household, hygiene or toilet articles and their parts, aluminum, among others. In this context, President Javier Milei's intention to sign a Free Trade Agreement with the United States could include some issues related to this matter. We will see what the outcome of the Argentine President's visit to his counterpart this weekend is.
As can be seen, in these thirty days of Trump's government there have been more developments in trade matters than perhaps in several previous years. The pieces are beginning to move on an increasingly uncertain international level. Trump's arrival to the presidency of the United States has accelerated the process of international trade reforms, which has been slowing down. The unilateral increase in tariffs is not new, nor are the non-tariff measures, currently disguised under environmental provisions.
The above clearly shows that the rules that we knew until not long ago, before the pandemic, began to change. We are facing a period of change, and of course they have an impact on the commercial, economic, geopolitical, strategic, territorial, and other aspects. We know the causes that give rise to these events, however, we cannot yet foresee the effects that these decisions will have in the medium term, where all countries are affected to a greater or lesser extent. We will have to closely follow the news to find out how the events that will set the guidelines for global trade in the future developed.
Lautaro M. Ramirez is a lawyer, holds a Master's degree in Latin American Integration and is a specialist in integration policies from the National University of La Plata. He holds a diploma in trade and environment from American University, Washington DC, and a postgraduate degree in "Law, Economics, and Politics in Comparative Perspective: European Union and MERCOSUR" from the University of Bari, Italy.
In the Argentine Public Sector, he served as Technical Advisor to the Ministry of Agriculture of the Nation, in the negotiations of the MERCOSUR-EU Agreement (2009-2010), to the Ministry of Production of the Nation for compliance with the WTO case DS438: Argentina - Measures affecting the import of goods (2015-2016), Director of Commerce of the Province of Buenos Aires (2017-2018) and advisor to the Agency for the Promotion of Investments and Foreign Trade. He served as Rapporteur of the Foreign Trade Commission of the Honorable Chamber of Deputies of the Province of Buenos Aires (2019-2021).
In the international arena, he has served as a legal advisor and consultant to various international organizations on regional economic integration and market access, such as ALADI, OAS, IDB-INTAL, SELA, and WTO, among others. He teaches undergraduate and graduate courses in Argentina and abroad. He is the head of the consulting firm L3comex and an associate at Insight LAC.
