Unveiling the Ambitions of Trump's 'America First' Trade Policy
On Thursday, February 27, the Association of Foreign Press Correspondents in the United States (AFPC-USA) held an educational program with Dr. Deborah Elms, Head of Trade Policy at the Hinrich Foundation and author of The Shock and Awe Hidden in Trump’s America First Trade Policy Memo, in which she unpacked the strategic direction of U.S. trade policy.
This program, organized in partnership with the Hinrich Foundation, explored the key takeaways from the memo, the legal and economic implications of the proposed measures, and how they may shape global trade. Given the rapid developments in this space, we also covered the latest policy changes and geopolitical shifts up until the time of the program.
This program was moderated by Ryohei Yasoshima, a Washington correspondent for NIKKEI Asia, a Japanese economic daily. Ryohei primarily covers U.S. trade, technology, and antitrust policy. From 2020 to 2024, he served as a Digital Policy Editor in Tokyo. Since 2012, he has also covered international taxation and competition policy.
AFPC-USA is solely responsible for the structure and the development of this program. Below, foreign correspondents will find a summary of some of the most important takeaways from the presentation.
DEFINING “AMERICA FIRST” TRADE POLICY IN THE EARLY DAYS OF THE TRUMP ADMINISTRATION
Elms begins by emphasizing the need to stay mindful of the timing of their conversation, noting that with Trump’s approach to trade policy, things can shift rapidly—sometimes within minutes. She points out that while U.S. trade policy has always had global significance, the unpredictability of Trump’s decisions heightens the stakes for the entire world. This unpredictability is landing at a time when the global trade system is already under serious strain, compounding the challenges. Many key global players are dealing with domestic political instability, leaving them less equipped to counterbalance the shifts in U.S. policy—such as South Korea’s lack of a government, Canada’s leadership transition, and upcoming elections in Australia.
Deborah Elms
She explains that Trump’s “America First” trade policy is unique and disruptive, breaking with 70-80 years of established global trade norms. It’s not just the policies themselves that make this era so turbulent, but also the speed and inconsistency with which they’re introduced. Trump’s policy announcements come through a wide variety of channels: executive orders, presidential memos, off-the-cuff statements, and formal federal register publications. This creates confusion around which announcements will materialize into enforceable policies and which are just rhetoric. Businesses and international partners are often left wondering whether they should take specific policies seriously or wait for more clarity.
Elms also describes how some of the changes Trump has announced are already in force, while others remain in limbo, creating further uncertainty. For businesses trying to make long-term decisions—like placing orders for back-to-school merchandise months in advance—this uncertainty poses real financial risks. A policy shift could mean significantly higher costs, making products harder to sell later. This environment of unpredictability, combined with weakened global institutions and the rapid pace of U.S. policy changes, creates a uniquely challenging situation for businesses, policymakers, and journalists alike.
Ultimately, Elms defines “America First” trade policy as a combination of radical shifts from long-established norms, unpredictable decision-making, and a lack of clarity on policy enforcement. This approach leaves global markets, governments, and businesses struggling to keep pace and make informed decisions.
“This challenge is not just prompts, unusual policies, a weak system, it's also this sort of speed and the uncertainty about whether these changes will actually be implemented as intended, whether they will be postponed at some point, whether they will be watered down or whether they will be put in as expected,” she said, “and I think that level of uncertainty is creating additional challenges and certainly additional challenges for journalists who are trying to cover this.”
Elms describes how the Trump administration’s approach to policymaking, especially in trade, operates with an unprecedented level of executive authority. Trump often bypasses traditional legal and procedural frameworks, leaning heavily on the broad powers vested in the presidency. Almost every policy announcement begins with a declaration of authority from the president, without seeking approval from Congress or adhering strictly to established legal statutes.
Elms explains that this approach allows Trump to act with remarkable speed, often faster than legal experts or existing processes would typically allow. This has created discomfort among legal professionals, who often question the legal basis of Trump’s actions and the lack of procedural consistency. Despite this, Trump’s administration continues pushing policies forward with minimal regard for these concerns.
Elms also discusses how the administration uses various legal tools to justify its trade policies. One of the most prominent is Section 232, which is based on national security concerns. This provision allows the U.S. to restrict trade on the grounds that unfettered imports could threaten national security, though it’s supposed to follow a lengthy investigative and procedural timeline.
Another key tool is Section 301, focused on addressing unfair trade practices. Elms notes the irony that her own PhD dissertation was on Section 301, which had largely been retired after the U.S. promised in 1995 not to use it again — until Trump revived it in his first term. Section 301 allows the U.S. to act as judge, jury, and executioner in determining and punishing unfair trade practices, a power that was used extensively against Japan and Korea in the past and is now primarily aimed at China.
Elms introduces the Emergency Economic Powers Act (IEEPA) as a newer and more flexible tool in Trump’s arsenal. Unlike the other statutes, IEEPA allows the president to take immediate action without long investigative periods or drawn-out negotiations. Originally designed for economic emergencies, IEEPA gives Trump sweeping powers to impose economic measures quickly, aligning with his preference for immediate punishment and negotiation afterward.
Elms concludes by noting that the Trump administration’s trade policies are driven by this broad interpretation of executive authority, using a mix of these legal tools — sometimes clearly defined, sometimes not — to rapidly implement tariffs and other economic measures. This results in an environment of legal ambiguity and unpredictability, with Trump’s declarations often serving as the primary justification for action.
ON TARIFFS
Elms breaks down Trump’s proposed "reciprocal tariffs" policy, highlighting its complexity, logistical challenges, and potential for economic chaos. Although the policy has been announced and is set to take effect on April 1st, the supporting report and full details are still pending — a date Elms suggests everyone should mark because of the likely upheaval it will cause.
The concept of reciprocal tariffs sounds simple — the idea that if one country charges higher tariffs on U.S. goods, the U.S. will raise its tariffs to match. But Elms explains why this approach is both misleading and problematic. Tariffs have never been evenly aligned across countries — and that’s by design. Through decades of international trade negotiations, countries set different tariffs based on their domestic needs and the importance of specific industries. For example, one country might impose a 5% tariff on ballpoint pens while another imposes 20%, based on their own economic priorities.
Trump sees this imbalance as unfair, but Elms argues that his solution — raising U.S. tariffs to match higher foreign tariffs — only punishes American consumers. If a foreign country charges 20% on pens while the U.S. charges 5%, Trump’s policy would raise the U.S. rate to 20%, increasing costs for American buyers without providing any clear benefit. Notably, the policy only works one way: the U.S. would increase its tariffs when foreign tariffs are higher but would not lower them when foreign tariffs are lower.
Beyond the economic impact, Elms points out the enormous logistical nightmare this policy would create. The U.S. has around 12,500 tariff lines — individual categories for different products — and there are 165 WTO member countries. Matching each country’s tariff on each product would create over 2 million different tariff combinations, a staggering administrative burden.
But the most concerning part of the policy, according to Elms, is its open-ended and arbitrary nature. Trump’s plan includes additional categories for tariff increases beyond just product tariffs: the U.S. could impose extra charges based on a country’s tax policies, currency practices, or virtually anything the U.S. Trade Representative’s office deems unfair. This creates what Elms calls a "pick your own tariff adventure" — a situation where tariffs could be raised unpredictably and without clear guidelines.
Elms warns that implementing this policy would create massive uncertainty for businesses, making it nearly impossible to calculate costs and plan international trade. Beyond the chaos it would cause within the U.S., other countries would undoubtedly retaliate, triggering a spiral of trade wars and economic instability. In short, Elms views this reciprocal tariff policy as fundamentally opposed to the established principles of global trade and a recipe for international backlash and domestic disruption.
Elms continues to highlight the unpredictability and chaos of Trump’s proposed reciprocal tariff policy. The first part of the policy — matching higher foreign tariffs while keeping U.S. tariffs the same when foreign ones are lower — is already complicated, creating 2 million possible tariff combinations. But the second part, which allows the U.S. to add tariffs based on anything deemed “unfair” — like VAT systems, non-tariff barriers, investment regimes, or subsidies — is even more problematic because there’s no clear way to calculate those additional tariffs.
Elms compares this process to spinning a roulette wheel, where the U.S. could arbitrarily decide on random tariff increases without any consistent logic. Companies trying to plan their trade strategies would face complete uncertainty, never knowing when or how their sectors or products might be targeted. Worse, the policy opens the door to discriminatory practices, where tariffs could be imposed not just on entire countries but on specific sectors or even individual companies.
Despite how unworkable and chaotic this approach seems, Elms warns that Trump is deeply committed to it. He’s repeatedly voiced enthusiasm for this kind of tariff tool, making it highly likely that some version of this policy will move forward if given the chance. This creates a scenario where the U.S. could arbitrarily impose tariffs on any product, at any time, with no clear process or rationale — a situation Elms describes as “choose your own tariff adventure” and “genuinely crazy” from every angle, including logistics, operations, and market stability.
Elms points out the gap between campaign rhetoric and real-world consequences, warning that Trump’s tariff policies could quickly become chaotic and damaging. She already sees signs of economic uncertainty, like declines in home sales, college enrollments, and even people delaying retirement due to rising prices and inflation fears. The core issue is who pays tariffs — and it’s American consumers and businesses who bear the cost. Companies importing raw materials, parts, and finished goods will pass those costs on, leading to higher prices and a weaker investment climate.
Elms uses the "rock in the pool" analogy to describe the chaos: Trump’s policies are like throwing a massive boulder into a small pool, creating initial shockwaves that spread globally. But when those waves hit the edges and rebound unevenly, they create prolonged, unpredictable turbulence. As other countries retaliate with their own tariffs, it adds more “rocks”, making the situation even more unstable and erratic.
She further emphasizes that Trump thrives on this chaos, seeing it as a feature, not a bug. But for businesses and consumers, this uncertainty makes it nearly impossible to plan. The disruption of an 80-year-old global trade system creates long-term damage that could take years to undo — if it even can be undone. While some may see these radical changes as necessary corrections, Elms predicts a “mountain of people” will view it as a disaster.
Later, when taking questions from attendees, she discussed how the issue of currency manipulation has become a central concern, particularly in the context of Trump’s administration, which has focused on reciprocal tariffs. According to a memo from the White House, currency manipulation is one of the key categories under the reciprocal tariffs plan, which has been a long-standing point of tension for Trump.
While it’s unclear if these tariffs will move forward in full force, Elms speculated that they could be used strategically, with Trump targeting specific countries over issues like currency manipulation or non-tariff barriers. She noted that countries accused of currency manipulation could face significant challenges, especially in regions like Asia, where many nations have trade deficits with the U.S. and employ complex industrial policies. Elms highlighted the uncertainty and anxiety this causes for Asian governments, as they face potential tariffs and trade disputes on multiple fronts.
ON HOW TRADE POLICIES MIGHT CHANGE IN THE FUTURE
Elms expressed concerns about the future of global trade, acknowledging the potential for countries to either strengthen the current system or pivot to new models, such as smaller or regional agreements. However, she fears the incentives for individual countries often conflict with collective action, leading to a "coordination problem."
This lack of cooperation, seen in past global failures like the 1930s, makes it harder to achieve collective benefits. She pointed to the WTO's recent difficulties, where important global issues were sidelined, and efforts to form smaller, more agile groups within the organization were blocked. With countries like the U.S. holding veto power, Elms worries that without coordinated action, global trade might revert to a "law of the jungle" scenario, where only the strongest nations thrive.
“Fingers crossed it's early days, maybe they get coordinated, but I suspect that we're back to law of the jungle,” she said. “If you're not at the top of the food chain in the law of the jungle, you're in trouble.
ON THE WTO
Elms is seriously concerned about the future of the WTO, stating that it is in jeopardy unless member countries can unite to address its challenges. She highlighted the danger of nations focusing too much on their narrow interests or business as usual, which might prevent any meaningful reform.
Elms compared the importance of the WTO's rules and agreements to the necessity of oxygen—people won't realize how crucial it is until it's gone. She criticized the WTO's broken dispute settlement system and the damaging impact of unilateral actions like Trump’s tariffs, which undermine foundational principles of non-discrimination and reciprocity. Elms warned that if the WTO system collapses, it would create a chaotic, law-of-the-jungle environment, particularly disadvantageous to smaller and developing countries that have relied on the stability the system provided.
Elms also acknowledged that currency manipulation is not a new issue in trade discussions, citing debates during the Trans-Pacific Partnership (TPP) negotiations about whether to address it within the agreement. While it wasn't included at the time, the topic remains on the table. She explained that currency manipulation, specifically artificially deflating a currency to boost exports, can give a country an unfair trade advantage by making its products cheaper and overwhelming competitors' domestic markets.
While she agreed there are real issues tied to currency manipulation, she criticized the approach taken by the Trump administration, particularly using tariffs as a solution, calling it a problematic method. Nonetheless, she recognized the legitimacy of the concern and the need to address it in some form.
ON WHETHER THERE WILL BE A “1930s STYLE GLOBAL TRADE WAR”
Elms hoped it would not occur. She explained that when one country raises trade barriers, it often triggers similar actions from others, leading to a cycle of retaliation. Without a global system like the WTO to mediate disputes, these actions could escalate into a more complicated and chaotic trade environment.
While she hoped the situation wouldn’t lead to the extreme consequences of the 1930s, which culminated in a hot war, Elms acknowledged the unusual and unpredictable nature of the current circumstances. She emphasized the vital role of journalism in navigating this uncertain period, stressing that accurate reporting on policies, their consequences, and their broader impact is essential. This understanding is crucial for preparing for potential challenges and avoiding undesirable outcomes.
