A Big Moment for Trade

Despite all eyes on the government shutdown, trade policy deserves attention in the coming weeks. 

President Trump announced a 10% increase in tariffs for imports from Canada after calling off negotiations on trade. The President’s change in position was spurred by television ads against U.S. tariffs that were sponsored by Ontario. This, of course, could change as Canada’s leadership works to strengthen the relationship and lower tensions with their largest trade partner.  It also does not help to have a division with the U.S. while the White House is considering how to best adjust the U.S.-Mexico-Canada Agreement (USMCA) next year.  

This week, the President is traveling to Asia, which includes a meeting with China’s Xi Jinping to discuss the ongoing trade negotiations between the U.S. and China. The President recently announced his intention to add a 100% tariff on Chinese imports if China does not increase access to critical minerals. Given how significant China’s trade relationship is with the United States (for both countries), this meeting is important to watch, especially as President Trump recently indicated that both sides will need to make concessions.  

Of course, the looming case before the Supreme Court around the President’s authority to implement tariffs under the International Emergency Economic Act (IEEPA) has the potential to significantly upend the President’s trade agenda. Briefs have already been submitted to the Court, oral arguments are scheduled for November 5th, and the Court is expected to publish their ruling by the end of the year.  

Announcements around Section 232 tariffs (based on the recent comment period requesting additional inclusions) and Section 301 tariffs (based on the recent comment period about existing exclusions) are expected soon.  

And if that isn’t enough for the trade sector, there are also a number of other negotiations moving forward (that could be finalized soon), with several additional major trading partners, including Korea and India.  

Trade is not a policy space to ignore at the moment.  As the White House continues to push trade as a core part of their economic plan, this space will only get more active…despite hopes by some to have more certainty in this policy space.  Do not expect Congress to engage heavily here (at least publicly) however, as tariffs are outside of their control and they do not want to inherit political risk around tariffs if they can avoid it.