The 'America First' trade policy blueprint

The blueprint

President Trump wasted no time reviving his “Tariff Man” persona, kicking off his term with a bold stroke—signing the “America First Trade Policy” memorandum on Inauguration Day. This executive order puts U.S. trade under a microscope, tasking multiple departments with a deep-dive review of trade practices and imbalances, with a deadline to report back by April 1. But make no mistake—Trump isn’t waiting for the paperwork to land on his desk. The first tariff bombs could be dropping as early as Saturday, targeting Canada, Mexico and China, setting the stage for a high-stakes trade battle.

The sweeping trade overhaul is broken into three key fronts: (1) Taking on Unfair and Unbalanced Trade, (2) Recalibrating Relations with China, and (3) Strengthening Economic Security. And the first order of business? Reining in the U.S.’s massive $1.2 trillion goods trade deficit. The game plan includes imposing a “global supplemental tariff”—a blanket levy meant to balance the books. While the deficit, as a percentage of GDP, sits at a manageable 4.1%, the raw dollar figures paint a far more ominous picture. And with China, the EU, Mexico, and Vietnam collectively responsible for 70% of that shortfall, there’s no doubt where the administration is aiming its crosshairs.

While Trump’s focus is on goods, it’s worth noting that over 80% of the U.S. economy runs on services, where the U.S. enjoys a trade surplus. That surplus, however, is just $296 billion, nowhere near enough to offset the gaping hole in goods trade. The total trade deficit still stands at $910 billion, and Trump is making it clear—tariffs are coming. The fewer exemptions, the better, as a streamlined system generates more revenue and sends a tougher message. But here’s the catch—not all deficits are created equal. The U.S. actually runs trade surpluses with some nations, including a $55 billion surplus with the Netherlands and a well-balanced trading relationship with Canada.

That hasn’t stopped the administration from going full throttle. The memorandum fires off several other hard-hitting directives, including a potential External Revenue Service (ERS) to take over tariff collection, a public consultation period to review the USMCA in 2026, and a deep-dive into currency manipulation—with China, Japan, South Korea, Taiwan, Vietnam, and Germany already on a watchlist. And let’s not forget the scrutiny of digital services taxes, which have primarily targeted U.S. tech giants—expect that fight to heat up.

Then there’s China. Trump is circling back to the Phase One Trade Agreement, originally signed in January 2020, meant to curb intellectual property theft, technology transfers, and unfair trade practices. That deal was supposed to ease tariffs in exchange for $200 billion in increased Chinese purchases—but that never happened. Instead, the post-pandemic supply chain chaos flooded the U.S. with Chinese imports, widening the deficit further. Now, the administration is reviewing the agreement and considering reinstating or escalating tariffs if China isn’t playing ball.

But the trade war doesn’t end there. The national security angle is getting serious attention, with a directive to review the U.S. industrial and manufacturing base and assess whether additional tariffs under Section 232—like the steel and aluminum levies from Trump’s first term—are needed. Expect more sectors to fall under scrutiny. And, in a move directly tied to border security and the fentanyl crisis, the memorandum orders an investigation into illicit trade flows from Canada, Mexico, and China, with recommendations for trade-based countermeasures.

Bottom line: The tariff storm is coming

Trump once proudly called himself “Tariff Man”, and if this memorandum is any indication, he’s about to live up to the name once again. A massive shake-up in global trade is on the horizon, and the ripple effects could hit markets, supply chains, and global growth hard. Brace for impact—the U.S. could be about to throw down in the biggest trade war we’ve seen in history.