Trump's new trade policy agenda has a clear message: expect more tariffs

WASHINGTON, D.C. — Expect more tariffs.

That’s the rub from the 2026 U.S. Trade Policy Agenda, which U.S. Trade Representative Jamieson Greer delivered to Congress this week.

It lays out plans for U.S. President Donald Trump’s trade dealings this year, signalling that the Supreme Court ruling against his International Emergency Economic Powers Act (IEEPA) tariffs has not deterred the “tariff man.”

“President Trump continues to flip the script on forty years of non-reciprocal trade practices …,” said Greer. 

So how does this differ from 2025’s agenda, and what does it mean for U.S. trading partners like Canada?

While the 2025 agenda framed the Canada-U.S.-Mexico Agreement (CUSMA) as a success, this year’s has plenty of complaints. 

Raj Bhala, an international trade law specialist and professor at the University of Kansas, referred to the two documents as a “Dr. Jekyll and Mr. Hyde” comparison.

“In 2025, we did really well. Everything was copacetic with respect to Canada,” he said. “In 2026, you get this Mr. Hyde response: ‘No, there are a lot of problems here. We’re going to attack you.’”

This year’s trade agenda also pivots from making a case for tariffs as a legitimate foreign policy tool toward them as the central pillar of U.S. geopolitical and economic strategy. The trade deficit is now a “national emergency,” justifying higher tariffs, demands for bilateral deals, and expanded government intervention.

“Tariffs are now the main pillar of Trump’s foreign policy toolbox,” said Diego Marroquín Bitar, fellow at the Center for Strategic & International Studies.

The U.S. will expand its Agreement on Reciprocal Trade (ART) program with eight countries. These require partners to lower their tariffs and accept U.S. tariffs that are lower than the Section 122 10 per cent duties but higher than most-favoured nation status ones, in exchange for access to the U.S. market. 

According to Tori Smith, senior VP at Forbes Tate Partners in Washington, D.C., Trump wants to lean on the ARTs for agricultural market access.

“It’s my understanding,” said Smith, “that USTR will use that as an opportunity to say, ‘Okay, you made these commitments. We need to be following through on them, especially on things like agriculture.’”

She expects the U.S. to forge similar ARTs with countries that have “frameworks” in place, including the EU, India, and Japan, to name a few. 

The agenda also outlines the Agreement on Trade in Critical Minerals (ATCM) as a key initiative for finding like-minded partners to set up border-adjusted price mechanisms for critical minerals.

While the U.S. is trying to homeshore its production capacity for critical minerals, Marroquin noted that “there’s also a realization that they don’t have the refining capacity and sometimes even have the minerals” for this. This will come up in the CUSMA review, and Canada, because it has greater natural resources than Mexico, is positioned to use that to its advantage. 

“Critical minerals are where Canada has real leverage — it has what the U.S. needs,” he said.

Since the IEEPA court decision, the White House has levelled Section 122 tariffs globally at a rate of 10 per cent, but this is just a “bridge between the old system and the new system,” said Marroquin. 

The next chapter of U.S. trade policy will see Trump rebuild his tariff wall with Section 232 and 301 tariffs, he explained. These processes involve months-long investigations.

The plan is to keep the existing 232s in place, on Canadian steel, aluminum, and other exports, and to expand on them.

Canada may have protection for the bulk of its trade under CUSMA, but the share of unaffected products is being whittled away by the 232 tariffs, which Marroquin estimates affects a third of all trade with the U.S.

“About 34 to 37 per cent of Canadian exports are still exposed to Section 232 tariffs, even when fully USMCA-compliant,” he noted.

Ottawa could see 232s initiated against Canadian aircraft, agricultural products, especially dairy, and digital trade and intellectual property, according to Scott Lincicome, VP at the Cato Institute’s Herbert A. Stiefel Center for Trade Policy Studies in Washington, D.C. 

Marroquin said he expects 232s on pharmaceuticals, and more on steel, aluminum and medical devices, plus semiconductors. 

“If the universe of tariff-free trade keeps shrinking, it undermines the credibility of (CUSMA) itself.”

That is why he believes the CUSMA review will be difficult so long as there is no movement on reducing or eliminating some of the existing 232s.

The agenda also says plenty about CUSMA.

The 2026 agenda mentions that CUSMA was important for rebalancing economic relationships with Mexico and Canada, but it complains about continuing trade deficits with both countries, and with Canada, specifically about dairy market access and digital services discrimination.

Mexico, Smith said, has been “early and often” to the table with their U.S. counterparts, while Canada has only recently appointed a chief negotiator and a new ambassador. Ottawa is clearly trying to reset the U.S.-Canada diplomatic relationship, but Smith said it has lagged in talks. 

She expects the review to be noisy but ultimately constrained. 

“You’ll probably see the president threaten to withdraw from USMCA, say it’s the worst deal ever … but at the end of the day, I think it would be really hard for them to actually pull out of it or make too many substantive changes … because those costs get really high,” said Smith.

Marroquin expects the talks to be “painful” and to drag out – perhaps into 2027 – but he agrees that all three countries have strong economic reasons to extend the deal.

Lincicome, meanwhile, said Trump has already shown his cards on how far he’s willing to go by walking back IEEPA tariffs for CUSMA-compliant goods. 

“That’s a tell that he’s not willing to blow up the North American supply chain like that.”

But with the plans for more 232s, it’s also clear he plans to “impose a little pain here and there,” Lincicome added.

National Post

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