Pursuant to the January 20, 2025 Presidential Memorandum on America First Trade Policy (AFTP), directed to the Secretary of State, Secretary of the Treasury, Secretary of Defense, Secretary of Commerce, Secretary of Homeland Security, Director of the Office of Management and Budget, U.S. Trade Representative, Assistant to the President for Economic Policy, and the Senior Counselor for Trade and Manufacturing, the President instructed the Department of the Treasury, the Department of Commerce, and the United States Trade Representative to report to the President on April 1, 2025, on the topics set forth therein, consisting of 24 individual chapters containing the reviews, investigations, findings, identifications, and recommendations enumerated in Sections 2(a) through 4(g) of the Presidential Memorandum. The Report also includes the expanded scope of work on non-reciprocal trading practices directed by the February 13, 2025 Presidential Memorandum on Reciprocal Trade and Tariffs. The findings from Sections 3(c), 3(d), and 3(f) of the February 21, 2025
Presidential Memorandum on Defending American Companies and Innovators from Overseas Extortion and Unfair Fines and Penalties are incorporated therein. This unified report is delivered to the President accordingly.
Introduction
An America First Trade Policy will unleash investment, jobs, and growth at home; reinforce our industrial and technological advantages; reduce our destructive trade imbalance; strengthen our economic and national security; and deliver substantial benefits for American workers, manufacturers, farmers, ranchers, entrepreneurs, and businesses. The America First Trade Policy Report (the Report) provides a foundation and resource for trade policy actions that will Make America Great Again by putting America First. It presents comprehensive recommendations covering the full scope of trade policies and challenges, from market access and the de minimis duty exemption to export controls and outbound investment restrictions.
The need for an America First Trade Policy is self-evident. For decades, the United States has shed jobs, innovation, wealth, and security to foreign countries who have used a myriad of unfair, non-reciprocal, and distortive practices to gain advantage over our domestic producers. There is no better expression of this dangerous state of affairs than America’s large and persistent trade deficit in goods, which soared to $1.2 trillion in 2024. Emerging from a tenuous geopolitical landscape in the previous four years, the United States cannot approach international economic and industrial policy issues with malaise. Our Nation’s future prosperity and national security requires a coordinated, strategic approach that fully utilizes the authorities and expertise of the Federal government to ensure the enduring economic, technological, and military dominance of the United States.
It was for this reason that President Trump wasted no time in launching the America First Trade Policy mere hours after taking his oath of office. In the weeks that followed, he expanded the scope of work to include non-reciprocal trading practices—a key driver of the trade deficit—and foreign extortion of American firms, especially leading U.S. technology companies. For most administrations, success in any of the 24 separate workstreams discussed in the Report would represent some of the most significant international economic change in the history of the country. Each could easily take decades to resolve. In fact, it is precisely because decades have passed without resolution of these issues that urgent action is required today. The United States does not have decades to continue tinkering around the edges of international economics—the urgency of the situation requires bold action now.
Today—on April 1—after a mere 71 days on the job, President Trump’s Administration delivered the results of its work. The Report provides the President with recommendations for transformative action. The Report charts a course for his Presidency to reshape U.S. trade relations by prioritizing economic and national security, and restoring the ability to make America, once again, a nation of producers and builders.
Specifically, the Report includes a chapter for each subsection in the AFTP Memorandum, with an additional chapter for Section 3(f) of Presidential Memorandum on Defending American Companies and Innovators from Overseas Extortion and Unfair Fines and Penalties; reporting pursuant to Sections 3(c) and 3(d) of the latter are included within Chapter 3. Although the full Report delivered to the President is non-public, what follows is a brief public summary of the contents of each chapter.
Addressing Unfair and Unbalanced Trade
Chapter 1. Economic and National Security Implications of the Large and Persistent Trade Deficit (Section 2(a) of AFTP)
The Report opens with a discussion of the magnitude and urgency of the economic and national security threat posed by the large and persistent trade deficit. In particular, the trade deficit demonstrates a fundamental unfairness and lack of reciprocity in how the United States is treated by its trading partners. For decades, while the United States has kept its tariffs low and its economy open, our trading partners have imposed egregious tariff and non-tariff barriers on American goods and services. These unfair and non-reciprocal trade practices have undermined U.S. competitiveness, leading to business closures, job losses, missed market opportunities for American exporters, loss of industrial capacity, and an atrophying of our defense industrial base and national security posture. The sum total of these various non-reciprocal practices is that American exporters are less competitive abroad and foreign imports are artificially more competitive in the United States. Hence, our large and persistent trade deficit. The Report makes recommendations to the President to reduce the trade deficit, including the imposition of a tariff on certain imports in pursuit of reciprocity and balanced trade.
Chapter 2. The External Revenue Service (Section 2(b) of AFTP)
Through a collaboration between the Department of Commerce (DOC), the Department of the Treasury, and the Department of Homeland Security (DHS), the creation of an External Revenue Service (ERS) offers an opportunity to improve tariff collection. Tariffs have historically played a central role in the collection of Federal revenues. One way the United States can maximize its revenue recovery while deterring fraudulent and unfair trade practices is by establishing a centralized system to optimize revenue collection in the form of an ERS. By closing regulatory gaps and modernizing revenue collection mechanisms, the United States can reaffirm its commitment to a strong, fair, and enforceable trade system that benefits American businesses and taxpayers alike.
Chapter 3. Review of Unfair and Non-Reciprocal Foreign Trade Practices (Section 2(c) of AFTP)
U.S. trading partners pursue various unfair and non-reciprocal trade practices. In its review, the Office of the U.S. Trade Representative (USTR) identified more than 500 of these practices, and stakeholders reported many more during a public comment process. Many countries impose higher tariffs on U.S. exports than the United States imposes on imports from those countries. The U.S. average applied tariff is 3.3%. But the average tariffs in the European Union (EU) (5%), China (7.5%), Vietnam (9.4%), India (17%), and Brazil (11.2%) are all higher. The disparity is even more evident in specific products. The U.S. most-favored nation (MFN) tariff on passenger vehicles is 2.5%, but the EU, India, and China tariff cars at much higher rates, 10%, 70%, and 15% respectively. The United States has no tariffs on apples, but India has a 50% tariff and Turkey a 60.3% tariff.
Non-tariff barriers by our trade partners are often an even greater obstacle. The EU only allows imports of shellfish from two states—Massachusetts and Washington—but the United States gives the EU unlimited access to the U.S. shellfish market. The United Kingdom (UK) maintains non-science-based standards that adversely affect U.S. exports of safe, high-quality beef and poultry products. Non-tariff barriers also include domestic economic policies that suppress domestic consumption. While the U.S. share of consumption to gross domestic product (GDP) is 68%, it is much lower in Ireland (24%), China (38%), and Germany (49%). This is because our trading partners pursue intentional policies of consumption-reduction (e.g., wage suppression and labor, environmental, and regulatory arbitrage) to gain unfair trade advantage over the United States. This, in turn, contributes to our large and persistent trade deficit. USTR recommends a number of ways in which current legal authorities might be used to address these unfair practices and trade barriers.
Chapter 4. Renegotiation of the U.S.-Mexico-Canada Agreement (Section 2(d) of AFTP)
In his first term, President Trump ended the job-killing North America Free Trade Agreement (NAFTA) and replaced it with the U.S.-Mexico-Canada Agreement (USMCA). USMCA gained new market access for American exporters and adopted rules to incentivize the reshoring of manufacturing to the United States. It also included an innovative review mechanism to ensure that the agreement is responsive to changing economic circumstances. Under the USMCA Implementation Act, USTR is statutorily required to initiate the review process ahead of the July 2026 deadline. Numerous changes are needed, such as stronger rules of origin to reduce the inflow of non-market economy content into the United States, expanded market access—especially for dairy exports to Canada, and action to address Mexico’s discriminatory practices, such as in the energy sector.
Chapter 5. Review of Foreign Currency Manipulation (Section 2(e) of AFTP)
The Secretary of the Treasury is required to assess the policies and practices of major U.S. trading partners with respect to the rate of exchange between their currencies and the United States dollar pursuant to section 4421 of title 19, United States Code, and section 5305 of title 22, United States Code. The Department of the Treasury will strengthen its ongoing currency analysis and address the lack of transparency by foreign governments in currency markets.
Chapter 6. Review of Existing Trade Agreements (Section 2(f) of AFTP)
The United States has 14 comprehensive trade agreements in force with 20 countries. There is significant scope to modernize existing U.S. trade agreements so that trade terms are aligned with American interests while addressing underlying causes of imbalances. This includes lowering foreign tariff rates for American exporters, improving transparency and predictability in foreign regulatory regimes, improving market access for U.S. agricultural products, strengthening rules of origin to ensure the benefits of the agreement appropriately flow to the parties, and improving the alignment of our trading partners with U.S. approaches to economic security and non-market policies and practices.
Chapter 7. Identification of New Agreements to Secure Market Access (Section 2(g) of AFTP)
The negotiation of new trade agreements with trading partners offers an opportunity for the United States to knock down non-reciprocal barriers to U.S. exports, especially for agricultural products, and reshape the global trading system in ways that promote supply chain resilience, manufacturing reshoring, and economic and national security alignment with partners. The Report identifies countries and sectors which may be ripe for the negotiation of America First Agreements.
Chapter 8. Review of Anti-Dumping and Countervailing Duty Policies (Section 2(h) of AFTP)
Administered by DOC, anti-dumping and countervailing duties (AD/CVD) are a critical tool to address unfair trade and support domestic manufacturing. Recommendations include considering the addition of new countries to the list of non-market economies, methodologies to better implement AD/CVD laws, and more-active self-initiation of new investigations.
Chapter 9. Review of the De Minimis Exemption (Section 2(i) of AFTP)
Packages containing imports valued at $800 or less imported by one person on one day currently enter the United States duty free. The United States should end this duty-free de minimis exemption. This exception has resulted in approximately $10.8 billion in foregone tariff revenue in 2024 alone. De minimis shipments also pose serious security risks to the United States. The de minimis exemption is a means by which fentanyl, counterfeit goods, and various deadly and high-risk products enter the United States with little scrutiny. Countless consumer products that don’t meet U.S. health and safety standards, such as flammable children’s pajamas and lead-ridden plumbing fixtures, enter the United States through under the de minimis administrative exemption every year. This is in part because the government does not collect sufficient data on low-value shipments to allow for enforcement targeting. The de minimis exemption also allows for importers to evade trade enforcement tariffs; for instance, goods entering through the de minimis exemption do not need to pay duties owed pursuant to Section 301 of the Trade Act of 1974. With nearly four million packages arriving each day through the de minimis exemption, it is imperative that DOC and CBP recover our rightful tariff revenue and defend our national security by ending the exemption.
Chapter 10. Investigation of Extraterritorial Taxes (Section 2(j) of AFTP)
The United States must combat efforts by foreign governments to collect illegitimate revenue from U.S. firms by imposing various discriminatory taxes and regulatory regimes aimed to capture the success of America’s most successful companies—not the least of which are our leading technology firms. Digital Services Taxes, for example, are often devised so as to shield most non-U.S. headquartered firms from taxation and UTPRs determine tax based primarily on factors outside the taxing jurisdiction. We need to ensure we have available the tools necessary to defend U.S. interests, including by providing technical assistance in furtherance of new legislative tools and further investigating identified taxes to determine the appropriate action.
Chapter 11. Review of the Government Procurement Agreement (Section 2(k) of AFTP)
Buy American is the epitome of common-sense public policy. In recent decades, the United States has weakened domestic procurement preferences by opening up our procurement market pursuant to the World Trade Organization’s (WTO) Agreement on Government Procurement (GPA). Unfortunately, this market access is lopsided. A 2019 report by the Government Accountability Office (GAO) on the GPA found that in 2010, the United States reported $837 billion in GPA coverage. This was twice as much as the $381 billion reported by the next five largest GPA parties (the EU, Japan, South Korea, Norway, and Canada), despite the fact that total U.S. procurement was less than that of these five partners combined. Moreover, some GPA partners open their procurement markets to third countries who are not parties, forcing U.S. suppliers to compete for the preferential market access they are entitled to under the agreement. To address this lack of reciprocity and unfair competition, the United States should modify or renegotiate the GPA, and if unsuccessful, withdraw.
An additional challenge is that, although defense procurement is closed to GPA partners, the Department of Defense still gives countries access to our huge defense procurement market by negotiating Reciprocal Defense Procurement (RDP) agreements. Shockingly, these RDPs not only open our market to foreign suppliers, but also require U.S. firms to move industrial capacity offshore as a condition of access to the markets of partner countries. These RDPs must be reviewed to ensure they put America First.
Economic and Trade Relations with the People’s Republic of China
Chapter 12. Review of the Phase One Agreement (Section 3(a) of AFTP)
A key success of President Trump’s first term was the Phase One Agreement with China. Unfortunately, five years following the entry into force in February 2020, China’s lack of compliance with the Agreement is a serious concern. China has failed to live up to its commitments on agriculture, financial services, and protection of intellectual property (IP) rights. USTR assessed this lack of compliance and recommends potential responses.
Chapter 13. Assessment of the Section 301 Four-Year Review (Section 3(b) of AFTP)
The United States imposed tariffs pursuant to Section 301 of the Trade Act of 1974 in 2018. The law requires that Section 301 actions be reviewed every four years by USTR. The first Four-Year Review was completed in May 2024 and resulted in increases of some of the Section 301 tariffs on China. USTR assessed the results of this review to ensure the Section 301 action remains fit for purpose.
Chapter 14. Identification of New Section 301 Actions (Section 3(c) of AFTP)
Given the expansiveness of China’s non-market policies and practices, there may be a need for additional Section 301 investigations. USTR looked at various elements of China’s non-market policies and practices to identify additional investigations that may be warranted.
Chapter 15. Assessment of Permanent Normal Trade Relations (Section 3(d) of AFTP)
After China was granted Permanent Normal Trade Relations (PNTR) with the United States in 2000, China took full advantage of the openness of the U.S. economy by leveraging its state-directed capital investments and subsidies, industrial overcapacity, lax labor and environmental standards, forced technology transfer policies, and countless protectionist measures. U.S. goods imports from China increased from $100 billion in 2000 to $463.9 billion in 2024, while the U.S. trade deficit in goods with China ballooned from $83.8 billion in 2000 to $295.4 billion in 2024. More than two decades after being granted PNTR, China still embraces a non-market economic system. USTR carefully reviewed legislative proposals related to PNTR and advised the President accordingly.
Chapter 16. Assessment of Reciprocity for Intellectual Property (Section 3(e) of AFTP)
The full extent of China’s abusive tactics and practices with respect to U.S. intellectual property is staggering. The Report catalogues China’s abuses of this system and recommends appropriate responsive actions to address China’s massive imbalance on treatment of intellectual property.
Additional Economic Security Matters
Chapter 17. Identification of New Section 232 Actions (Section 4(a) of AFTP)
In his first term, President Trump used Section 232 of the Trade Expansion Act of 1962 to save America’s steel and aluminum industries. Last week, President Trump invoked Section 232 to impose a 25% tariff on foreign automobiles and certain automobile parts to protect our automotive industrial base. Reshoring industrial production in key sectors is critical to national security, and DOC identified additional products and sectors that merit consideration for initiation of new Section 232 investigations, including pharmaceuticals, semiconductors, and certain critical minerals.
Chapter 18. Review of Section 232 Action on Steel and Aluminum (Section 4(b) of AFTP)
On February 11, President Trump ended all product exclusions and country exemptions for the Section 232 tariffs on steel and aluminum. DOC further explains the basis for this needed action and recommends additional measures for steel and aluminum for that could be taken.
Chapter 19. Review of U.S. Export Controls (Section 4(c) of AFTP)
The United States must ensure that its advanced technology does not flow to our adversaries. Export controls should be simpler, stricter, and more effective, while promoting U.S. dominance in AI and asserting global technological leadership.
Chapter 20. Review of the Office of Information and Communication Technology and Services (Section 4(d) of AFTP)
Using his authority under the International Emergency Economic Powers Act (IEEPA), President Trump created a new Office of Information and Communication Technology and Services (ICTS) at DOC in his first term. In the last administration, however, ICTS was underutilized. DOC reviewed ongoing ICTS work and identified key areas to strengthen and improve in line with ITCS’s original intent, including expanding its scope and remit to encompass advanced technologies controlled by our adversaries.
Chapter 21. Review of Outbound Investment Restrictions (Section 4(e) of AFTP)
President Trump’s America First Investment Policy serves as a basis for how the Administration will approach investment policy, including on outbound investment restrictions. Pursuant to the America First Investment Policy, the National Security Council and the Department of the Treasury will evaluate options that allow American business to thrive while ensuring that they, too, put America First and do not undermine U.S. national security interests. Among the things the Administration plans to evaluate is whether the scope of outbound investment restrictions should be expanded to be responsive to developments in technology and the strategies of countries of concern.
Chapter 22. Assessment of Foreign Subsidies on Federal Procurement (Section 4(f) of AFTP)
Foreign subsidies can disadvantage domestic products in a country’s government procurement market. The EU has recognized this problem and introduced the Foreign Subsidies Regulation (FSR) to address distortions caused by foreign subsidies for public procurement. OMB assessed the value of the FSR and other policies to tilt the playing field in favor U.S. producers by strengthening domestic procurement preferences and closing loopholes.
Chapter 23. Assessment of Unlawful Migration and Fentanyl Flows from Canada, Mexico, and China (Section 4(g) of AFTP)
On February 1, President Trump invoked IEEPA to impose tariffs on Canada, Mexico, and China to stop the threat posed by the flow of illegal migrants and drugs into the United States. DOC and the Department of Homeland Security (DHS) elaborated on the necessity for the strong action already taken by President Trump and identified measures to further stem the flow of illegal migrants and drugs into the United States.
Chapter 24. E-Commerce Moratorium (Section 3(f) of Presidential Memorandum on Defending American Companies and Innovators from Overseas Extortion and Unfair Fines and Penalties)
At present, WTO Members have committed to a temporary moratorium on customs duties on electronic transmissions, known popularly as the e-commerce moratorium. In other words, no tariffs on data flows. However, some countries—such as India, Indonesia, and South Africa—seek to tariff the flow of data, thereby destroying the internet and harming the competitiveness for U.S. companies that are global leaders. USTR assessed the risks posed by data tariffs and made recommendations to ensure that the e-commerce moratorium is made permanent.
Conclusion
The Report offers a broad, yet substantive, view of U.S. trade policy as it currently stands, and articulates a roadmap for where it should go. The U.S. trade policy of today does not address long-standing and destructive global imbalances, nor does it reflect the reality that the United States is the most open, innovative, and dynamic economy in the world, which is why we must work to unlock its full potential. Now is the time to pursue trade and economic policies that put the American economy, the American worker, and our national security first. This Report provides a foundation to do exactly that.
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