Donald Trump’s second presidency, initiated in January 2025, marked a renewed and intensified commitment to protectionist trade policies centered on economic nationalism. The administration aggressively deployed sweeping tariffs, renegotiated trade agreements with a focus on reciprocity, and pursued policies intended to protect U.S. industries from foreign competition, particularly from China.
Early in 2025, President Trump signed the Presidential Memorandum establishing the “America First Trade Policy,” which built upon the trade framework established during his first term. The policy’s central aim was to restore the United States’ leverage in global commerce by enforcing reciprocal tariffs on trading partners whose trade practices were deemed unfair or non-reciprocal. This approach signaled a departure from decades of free trade orthodoxy, instead promoting a model premised on protecting domestic manufacturing and raising wages for American workers.
From January through April 2025, the U.S. increased its average tariff rate dramatically from under 3% to an estimated 27%, the highest level in more than a century. Steel and aluminum tariffs were raised to 50%, while a 25% tariff was imposed on imported automobiles. Additional tariffs targeted categories including pharmaceuticals, semiconductors, and consumer goods, with exceptions granted to companies manufacturing goods domestically. Tariffs on Chinese imports were particularly severe, escalating to an average rate exceeding 100% on selected items by late summer.
The administration invoked several statutes to justify these tariffs, notably the 1962 Trade Expansion Act (Section 232) citing national security concerns, and the International Emergency Economic Powers Act (IEEPA), which was used to impose “reciprocal tariffs” from April 2025 onward. The invocation of these laws sparked a series of trade disputes and reciprocal actions by multiple countries, including Canada, Mexico, and China, further intensifying the trade war environment.
Protectionism and the “America First” trade policy
Trump’s trade policy framework, branded as the “America First Trade Policy,” prioritized reducing trade deficits, promoting domestic production, and securing supply chains. Early in 2025, his administration introduced a “Fair and Reciprocal Plan” targeting unfair trade practices globally. The policy called for reciprocal tariffs on imports based on the trading partners’ tariffs and non-tariff barrier measures against U.S. exports. This unprecedented strategy aimed to encourage trading partners to lower their trade barriers and stimulate repatriation of production facilities.
Tariff expansion and recent history
From January to April 2025, U.S. tariff rates escalated sharply, with the average effective tariff reaching approximately 27%, the highest in over a century. Steel and aluminum tariffs were raised to 50%, with auto tariffs set at 25%. Sector-specific tariffs targeted pharmaceuticals, semiconductors, and other high-tech goods, reflecting national security concerns. By September 2025, monthly U.S. tariff revenues soared to over $30 billion, more than tripling figures from the previous year.
Impact on U.S.-China trade relations
Trade tensions with China intensified as tariffs on Chinese imports were doubled by August 2025, reaching average rates upwards of 100% on numerous goods by November. New export restrictions on advanced technologies and software targeted China’s industrial base and its control of rare earth mineral exports. China responded with retaliatory tariffs of its own, capped at 125%, deepening the bilateral trade conflict. The trade war disrupted supply chains, increased costs for American manufacturers, and contributed to global economic uncertainties.
Tariff battles and legal challenges
Trump’s heavy use of tariffs encountered legal pushback both domestically and internationally. Businesses and foreign governments filed multiple lawsuits challenging the legality of tariffs imposed under national security and emergency economic powers. Judicial scrutiny focused on executive authority boundaries, with courts assessing whether tariffs met legal standards under U.S. and international law. These legal battles underscore tensions between swift executive action and rule-of-law governance.
Economic effects on American industries
Several domestic industries, notably steel and aluminum producers, experienced growth due to tariff protection. However, many sectors reliant on imported components faced increased costs and reduced supply chain efficiencies. Agricultural exports were particularly affected by retaliatory tariffs, prompting billions in government assistance. Consumer prices rose modestly yet unevenly, with durable goods and industrial materials impacted most notably. The policy also exacerbated labor market uncertainties in manufacturing and technology fields.
Position on multilateralism and trade alliances
Trump’s administration deprioritized multilateral trade negotiations and climate-coordinated trade policies, favoring bilateral deals leveraging U.S. economic dominance. The United States-Mexico-Canada Agreement (USMCA) was used to enforce stricter immigration and labor provisions aligned with trade nationalism objectives. European relations grew tense as tariffs remained high and subsidies escalated on both sides.
Future outlook for U.S. trade policy
Donald Trump’s second presidency, which began in January 2025, signaled a significant shift in United States trade policy characterized by an intensified commitment to economic nationalism and protectionism. Building on the nationalist economic agenda from his first term, Trump deployed sweeping tariffs, recalibrated trade agreements, and pursued strategies aimed at bolstering American manufacturing competitiveness and reducing reliance on foreign imports, particularly from China.
Central to the Trump 2.0 trade strategy was the “America First Trade Policy,” announced early in January 2025. This policy prioritized a rigorous review of trade relationships to ensure reciprocity and fair treatment for U.S. exporters. The policy explicitly called for the use of tariffs as a tool to address structural trade imbalances and counteract alleged unfair trade practices such as subsidies, currency manipulation, and restrictive market access measures enacted by foreign governments. The administration’s approach marked a departure from decades of U.S. support for liberalized global trade, instead emphasizing sovereignty and economic self-reliance.
Between January and mid-2025, the average tariff imposed by the U.S. rose sharply, hitting levels not seen since the early 20th century. Steel and aluminum tariffs were increased to 50 percent, and tariffs on automobiles and other industrial and technology goods were raised to 25 percent or more. The administration invoked several laws, including Section 232 of the Trade Expansion Act on national security grounds and the International Emergency Economic Powers Act (IEEPA), to impose an expansive array of tariffs, targeting trade imbalances with countries such as China, Canada, and Mexico. Notably, tariffs on Chinese imports averaged 100 percent on significant product categories by late 2025, intensifying an already volatile trade war.
Shaping America’s trade policy
Donald Trump’s second presidency continues to shape America’s trade policy through aggressive protectionism and economic nationalism. The sweeping tariff increases, tariff battles with key partners like China, and resulting economic impacts illustrate a decisive shift away from free trade orthodoxy. Legal challenges and global market responses will influence the durability of these policies, but the Trump administration’s legacy in trade policy is unmistakably assertive and transformative.