Price: New administration sets roadmap for trade, manufacturing

Section 2 of the memorandum focuses on “Addressing Unfair and Unbalanced Trade.” Agencies are instructed to investigate the source of annual trade deficits and propose recommendations to address them, identify unfair trade practices and recommend responsive action, assess the exchange rate policies of trading partners for manipulation, review the impact of existing trade agreements, and evaluate the negative impacts of the duty-free de minimis exception for imports less than $800.

Near to the trade lawyer’s heart, the memorandum also instructs the Secretary of Commerce to review and potentially modify technical aspects of the Commerce Department’s antidumping and countervailing duty (“AD/CVD”) regulations and policies, which many American steel and aluminum producers rely on to counteract unfairly traded merchandise. This includes exploring avenues to counteract the transnational subsidies that foreign governments increasingly use to support their companies in neighboring countries and to work around US AD/CVD measures.

Section 2 also instructs the USTR to begin the public consultation process in preparation for the July 2026 review of USMCA, a signal to Canada and Mexico that the United States will push for more favorable conditions.

Section 4 of the memorandum addresses “Additional Economic Security Matters.” Perhaps most immediately relevant to the steel and aluminum industries, the president directs a review of “the effectiveness of the exclusions, exemptions, and other import adjustment measures on steel and aluminum” under the Section 232 measures. Given that hundreds of thousands of tons of steel and aluminum have been entered under these carve outs — often over the objection of domestic producers — it is conceivable that the report will recommend narrowing available Section 232 exceptions. The Secretary of Commerce must also review the need for any new Section 232 measures.

The president’s decision to hold off on certain trade actions should not be overthought and reflects common sense: It’s hard to take action without the key cabinet members in place. The Senate Committee on Commerce, Science, and Transportation scheduled Secretary of Commerce nominee Howard Lutnick’s hearing for Jan. 29. The Senate Committee on Finance advanced Secretary of Treasury nominee Scott Bessent on Jan. 21, making a full vote likely in the coming days. Once agency leadership is in place, the various agencies will be able to better coordinate their approaches to trade and national security issues and sprint to meet the April 1 deadline for proposals.

The administration is also overhauling and reversing much of the Biden administration’s climate agenda, which will have some trade impacts. Through a series of executive orders, Trump immediately withdrew the United States from the Paris Agreement and other commitments under the United Nations Framework Convention on Climate Change. Also revoked is the International Climate Finance plan previously established by President Biden. And US international energy agreements are now to prioritize economic efficiency, American interests, consumer choice, and fiscal restraint. Trump has also revoked the previous administration’s executive orders establishing the Domestic Climate Policy Office, the National Climate Task Force, the Special Presidential Envoy for Climate, and the Buy Clean Task Force.

Day One also landed a blow to parts of the Inflation Reduction Act. Trump’s “Unleashing American Energy” executive order directed all agencies to “immediately pause the disbursement of funds appropriated through the Inflation Reduction Act… or the Infrastructure Investment and Jobs Act.”

However, the Office of Management and Budget later clarified that this pause only referred to funds that would contravene an enumerated list of policy statements. This executive order would also not appear to impact IRA tax credits, which are codified in statutes. Nevertheless, grant recipients, government contractors, and domestic producers taking advantage of IRA loans, grants, and tax credits should pay close attention to how this develops and may want to consult with government contracts counsel.

These actions set a course to build on the administration’s first term but at a much faster pace. In the first term, Trump issued his omnibus report on significant trade deficits executive order on March 31, 2017, requesting similar reports within 90 days.

In this second term, much more extensive analysis and reporting is due April 1. This administration is wasting no time rolling out its proposals.

But not all Trump initiatives on trade and other policy matters were reduced to writing on Day One, and not all Day One actions outlined in the “America First Trade Policy” memorandum will wait until April 1.

While signing the trade memorandum, Trump hinted that he would announce tariffs on imports from Canada and Mexico on Feb. 1. A day later, he also signaled that an additional 10% tariff may be imposed on imports from China. This should serve as a warning that, despite tasking agency heads with further investigation, the president has the ultimate say.

Trump has several different legal levers to make the final call and apply tariffs unilaterally. Don’t be lulled into thinking that all tariffs will be delayed until after the agencies release their findings. It appears that the Trump administration is teeing up a multilayered approach to tariffs that may vary by product and country, with some that could be universal.

As the president said in his Jan. 23 Davos speech: “Come make your product in America, and we will give you among the lowest taxes of any nation on Earth… But if you don’t make your products in America, which is your prerogative, then, very simply, you will have to pay a tariff – differing amounts, but a tariff – which will direct hundreds of billions of dollars, and even trillions of dollars, into our treasury to strengthen our economy and pay down debt.”

Editor’s note
This is an opinion column. The views in this article are those of experienced trade attorneys on issues of relevance to the current steel market. They do not necessarily reflect those of SMU. We welcome you to share your thoughts as well at info@steelmarketupdate.com.