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Trade Policy Under a Second Trump Administration – Tariffs, Tools, and International Impact

Introduction

Good afternoon, everyone. Welcome to Venable's series on trade policy as we navigate the potential changes under a second Trump administration concerning tariffs and their international implications. I’m Will Nordwind, a partner and co-chair of Venable's Legislative and Government Affairs group. Today, I’m joined by my partners Ashley Craig and Liz Low, both experts in our International Trade and Logistics Group, as well as Nick Cho, a senior policy adviser in our Legislative and Government Affairs team.

This webinar is the third in our series focused on navigating policy shifts under the expected second Trump administration, with Congress reconvening in January. We will explore how this political transition and the associated changes in executive actions and congressional dynamics will reshape various industries, specifically trade.

Today's Agenda

We're set to look at multiple facets of Trump's potential trade policies and tariffs and what they could mean for importers, exporters, and those engaged in international commerce. We'll delve into the options available to the incoming Trump administration regarding trade policy, particularly regarding tariff actions. Not only will we discuss timing and implications for key markets, but we will also consider various trade-related issues and the influence of Congress when it comes to trade policy under a Republican majority.

Ashley will guide us through the agenda, and throughout the presentation, we will all contribute our insights. There will also be a Q&A session toward the end.

Key Points of Discussion

  • Trump Administration's Tariff Options: The new Trump administration has several legal avenues to impose tariffs, many of which were utilized during Trump’s first term. These include:

    • Section 301 of the Trade Act: Allows for investigations into unfair trade practices, notably the tariffs on China.
    • Section 232 of the Trade Expansion Act: Used to impose tariffs on steel and aluminum based on national security.
    • Section 201 of the Trade Act: For temporary safeguards to protect domestic industries.

  • Existing Legislation: The administration could leverage existing legislation that deals with balance of payments or discrimination against U.S. commerce by foreign countries.

  • Potential New Legislation: While less likely due to political dynamics within a narrow Congressional majority, new legislation could also create frameworks for potential tariffs.

  • International Implications: We anticipate pushback from countries such as China, Canada, and Mexico, likely resulting in retaliatory tariffs. This could have far-reaching impacts on international trade and domestic industries.

Questions and Speculations

  1. Will Trump’s administration use tariffs strategically?

    • Speculation abounds regarding how aggressively tariffs will be applied to various products, as previous comments have hinted at potential tariffs on allies and adversaries alike.

  2. What might be the impact of using International Emergency Economic Powers (IEEPA)?

    • IEEPA could allow the administration to quickly impose tariffs but also brings a unique set of challenges concerning legal challenges and application procedures.

  3. What about Miscellaneous Trade and Tariff Bills?

    • While there are statutory frameworks in place for temporary duty suspensions, it is unclear how much reformation will occur under the new administration.

Ashley pointed out that companies can take preparatory actions now to mitigate tariff impacts that may arise once the administration takes office, especially focusing on contract modifications and supply chain adjustments.

Other Trade Concerns

There will be a rise in the enforcement of programs related to forced labor and the potential strengthening of Customs and Border Protection’s (CBP) oversight due to the mandates of the previous and upcoming administrations.

Furthermore, revisions to the shipping act could lead to increased vigilance on importers and exporters.

Upcoming Appointments

The presiding trade policies will also be influenced by the administration's cabinet picks, including nominees for the U.S. Trade Representative, Secretary of Commerce, and others, who may have varying degrees of influence over Trump's tariff decisions.

In conclusion, the implications of a second Trump administration’s trade policies are poised to be substantial, spanning both domestic industries and international relations. We urge attendees to remain vigilant and proactive during this transition period.

Keywords

  • Trump Administration
  • Trade Policy
  • Tariffs
  • Section 301
  • Section 232
  • IEEPA
  • International Trade
  • Retaliatory Tariffs
  • Forced Labor
  • Customs and Border Protection

FAQ

What are the potential tariffs under a second Trump administration?

The Trump administration may utilize several legal avenues to impose tariffs, particularly through Section 301 and Section 232, based on findings of unfair trade practices and national security concerns, respectively.

What actions can companies take to prepare for potential tariffs?

Companies should consider amending contracts, reviewing tariff classifications, stockpiling inventory, and possibly shifting sourcing to mitigate the financial impact of anticipated tariffs.

Will international trading partners retaliate against new tariffs?

It is highly likely that countries adversely affected by new tariffs will implement retaliatory measures, especially in sectors such as agriculture.

What is the potential impact of forced labor regulations?

The enforcement of forced labor prevention regulations is expected to increase under a new administration, affecting companies involved in international supply chains.

How much influence will the new trade team have on Trump’s policies?

The influence of the appointed trade team on Trump’s tariff policy remains uncertain, given the president's outspoken nature on international trade issues.

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