Key takeaways of the Memorandum for the Secretary of State
On January 20, 2025, President Trump introduced the “America First” Trade Policy[1], marking a shift in U.S. trade priorities. The main objective outlined is to “establish a robust and reinvigorated trade policy that promotes investment and productivity, enhances the Nation’s industrial and technological advantages, defend economic and national security and – above all – benefit American workers, manufacturers, farmers, ranchers, entrepreneurs, and businesses.”
The Memorandum emphasizes reducing trade deficits, strengthening economic security, and enforcing stricter trade measures through the implementation of several initiatives:
- Investigation of Trade Deficits: The Secretary of Commerce, in consultation with the Secretary of the Treasury and the U.S. Trade Representative, is tasked with examining the causes of persistent trade deficits in goods. This includes assessing economic and national security implications and proposing measures such as a global supplemental tariff to address these deficits.
- Establishment of the External Revenue Service (ERS): The memorandum proposes the creation of the ERS to oversee the collection of tariffs, duties, and other trade-related revenues, aiming to enhance the efficiency and effectiveness of revenue collection from foreign trade.
- Review of Unfair Trade Practices: The U.S. Trade Representative, in consultation with relevant departments, is directed to identify unfair trade practices by other countries and recommend appropriate actions to remedy such practices under existing U.S. laws and trade agreements.
- Assessment of the USMCA: In preparation for the July 2026 review of the United States-Mexico-Canada Agreement (USMCA), the U.S. Trade Representative is to assess the agreement’s impact on American workers, farmers, and businesses, and make recommendations regarding U.S. participation.
- Currency practices evaluation: The Secretary of the Treasury shall evaluate the currency policies of major U.S. trading partners to identify any manipulation or misalignment that provides unfair competitive advantages, and to recommend measures to counter such practices.
- Review of the De Minimis Exemption: The memorandum calls for an assessment of the current implementation of the $800 or less duty-free de minimis exemption, considering its impact on tariff revenues and the importation of counterfeit products and contraband drugs. Recommendations for modifications to protect U.S. revenue and public health are to be made.
- Export Control System Review: The Secretaries of State and Commerce are to review the U.S. export control system, focusing on maintaining and enhancing technological advantages and closing loopholes that allow the transfer of strategic goods and technology to strategic rivals.
Deadlines and Reporting:
- April 1st, 2025: Deadline for the delivery of three different unified reports on the sections outlined in the Memorandum.
- April 30, 2025: Deadline for the Director of the Office of Management and Budget to submit an assessment of any distorting impact of foreign government financial contributions or subsidies on US federal procurement programs.
Section 2: Addressing Unfair and Unbalanced Trade
- Review policies and regulations regarding the application of antidumping and countervailing duty (AD/CVD) laws, including with regard to transnational subsidies, cost adjustments affiliations and zeroing.
- Assess the loss of tariff revenues and the risks from importing counterfeit products and contraband drugs that each result from the current implementation of the 800$ or less, duty-free de minimis exemption.
- Review the impact of all trade agreements – including the World Trade Organization Agreement on Government Procurement – on the volume of Federal procurement covered by the Executive order 13788 “Buy American and Hire American”[1] and ensure that they favor domestic workers and manufacturers, not foreign nations.
Section 3: Economic and Trade Relations with the People’s Republic of China
- Review of the Economic and Trade Agreement between the government of the US and PRC and investigation of other acts, policies, and practices by the PRC that may be unreasonable or discriminatory and that may burden or restrict US commerce.
- Assess of the report entitled “Four-Year Review of Actions Taken in the section 301 Investigation: China’s Acts, Policies, and Practices Related to technology transfer, Intellectual property, and Innovation.”[2]
- Imposition of tariffs: the memorandum signals potential tariff increases on Chinese goods, considering “additional tariff modifications, particularly with respect to industrial supply chains and circumvention through third countries, including an updated estimate of the costs imposed by any unfair trade practices identified in such review.”
- Export Controls: Restrictions on technology exports to China are expected to tighten, focusing on areas like AI, semiconductors, and critical infrastructure.
- Intellectual Property Protection: The administration is doubling down on measures to combat IP rights such as patents, copyrights and trademarks.
Section 4: Additional Economic Security Matters
- Conduct a full economic and security review of the US industrial and manufacturing base to assess whether it is necessary to initiate investigations to adjust imports that threaten the national security.
- Review and assess the effectiveness of the exclusions, exemptions and other important adjustment measures on steel and aluminum.
- Review of US export control system and advise on modifications in light of developments involving strategic adversaries or geopolitical rivals.
- Recommend appropriate action with respect to the rulemaking by the Office of Information and Communication Technology and Services (ICTS) on connected vehicles.
- Review weather the Executive order 14105 “Addressing United States Investments in Certain National security Technologies and Products in Countries of Concern”[3] should be modified or rescinded and replaced.
[1] America First Trade Policy – The White House
[1] Presidential Executive Order on Buy American and Hire American – The White House
[2] 05.13.2024 Executive Summary of Four Year Review of China Tech Transfer Section 301 (Final).pdf
