In a recent announcement, President Donald Trump is set to issue a comprehensive trade memo, advising federal agencies to reassess U.S. trade relations with China, Canada, and Mexico. Despite speculative fears surrounding immediate tariffs upon taking office, this memo will not impose new tariffs but will instead initiate a careful evaluation of existing trade practices, according to sources from the Reuters and VOA News.

The global markets responded positively to this news, with a relief rally that saw stock increases and a drop in the U.S. dollar against various major currencies. Notably, President Trump, in his inaugural address, hinted at the establishment of an External Revenue Service designed to collect significant tariffs from foreign entities.

Trump reiterated that his administration’s goal is to reform the trade system primarily to "protect American workers and families," emphasizing a shift from taxing citizens to imposing tariffs on foreign countries. He had previously promised high tariffs of up to 60% on goods from China, aiming to alleviate the substantial $1 trillion trade deficit.

The memo will focus on scrutinizing trade deficits and addressing "unfair trade and currency policies" in these key nations, particularly assessing China's compliance with its previous trade commitments post-2020 agreement. Trade experts warn that potential duties could disrupt longstanding treaties and escalate costs across numerous sectors.

Despite initial expectations of immediate tariff implementations, the memo's approach hints at a detailed review process that may utilize existing trade laws such as Section 232 and Section 301, which allowed for previous investigations that resulted in tariffs during Trump’s first term.

Analysts predict that Trump will ultimately push for a universal tariff as part of his economic strategy, a component that remains central to his platform. Historical precedents show that trade tensions with China included imposing tariffs that resulted in extensive economic negotiations, culminating in a 2020 agreement for China to increase its U.S. imports by $200 billion—commitments that, as noted, have yet to be fulfilled due to global disruptions.

As Trump prepares to engage with trade agreements further, the memo serves as a strategic move that may allow him to leverage discussions surrounding the renegotiation of the USMCA as early as 2026.

Amidst these developments, industry experts continue to monitor the evolving landscape of international trade policies that will likely shape the global economy in the years to come.