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U.S. President Unveils “Fair and Reciprocal Plan” to Tackle Trade Deficits

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U.S. President Unveils “Fair and Reciprocal Plan” to Tackle Trade Deficits

In a landmark move to tackle long-standing trade deficits, the U.S. President has signed a memorandum titled “Reciprocal Trade and Tariffs”. This memorandum outlines a new policy aimed at establishing fair and balanced trade relationships with international partners, to the benefit of American workers and industries.

Read also: Week Three in Trade – First 100 Days of the New Administration

According to data from IndexBox, the United States remains one of the leading importers globally, with significant market openness compared to other major economies. However, this openness has often resulted in a persistent trade deficit, which the administration sees as a threat to economic and national security. The memorandum, therefore, introduces the “Fair and Reciprocal Plan” intended to counter non-reciprocal trade arrangements by applying equivalent tariffs on trading partners, addressing measures like value-added taxes, nontariff barriers, and other unfair practices.

The administration’s approach has gained attention for its comprehensive evaluation of trade imbalances, promising to examine tariffs, discriminatory taxes, and burdensome regulations imposed on U.S. businesses abroad. As reported, the United States Trade Representative, in collaboration with key agencies, will take all necessary actions within 180 days to propose remedies and guide the nation towards equitable trade relationships.

Source: IndexBox Market Intelligence Platform 

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RELEX study: 60% of Companies Revamp Supply Chains Amid Tariff and Market Turmoil

The second annual State of Supply Chain Report from RELEX Solutions and Researchscape reveals that businesses are making significant shifts in supply chain strategies to navigate growing trade uncertainties and economic volatility. According to the study, 60% of companies are not only investing in technology but also restructuring supply chains to enhance resilience and adaptability.

Read also: Trump Administration’s Tariff Changes Could Hit Shein Harder Than Temu

Surveying 579 retail, consumer packaged goods (CPG), and wholesale professionals across seven countries, the report highlights key challenges affecting global supply chains. Demand volatility emerged as the top concern, with 52% of respondents struggling to manage unpredictable consumer behaviors. Additionally, 47% cited global trade disruptions and rising tariffs as major threats, while 43% pointed to inadequate real-time data as a significant barrier to making agile supply chain decisions.

To counteract these disruptions, companies are implementing major operational changes. Many are diversifying their supplier networks, nearshoring production, and accelerating automation investments. Among retailers, 62% are optimizing costs through efficiency measures and price adjustments, while 50% are expanding supplier bases to mitigate economic and geopolitical risks.

“Supply chains are under immense pressure. Between tariffs, shifting demand, and unexpected disruptions, traditional approaches are no longer viable,” said Dr. Madhav Durbha, Group Vice President of CPG & Manufacturing at RELEX Solutions. “Companies that embrace AI, automation, and supplier diversification will emerge stronger, while those that resist change risk being left behind.”

The findings underscore an industry-wide transition away from reactive strategies toward long-term resilience. Businesses are prioritizing structural improvements to better withstand future economic, regulatory, and geopolitical challenges.

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ITF Group Strengthens Food Supply Chains Against Tariff Risks

ITF Group, a leading third-party logistics (3PL) provider, is collaborating with food distributors to minimize the impact of potential tariff disruptions. By enhancing operational efficiency, reducing costs, and improving shipment accuracy, ITF Group’s proactive strategies are becoming key components in effective supply chain risk management.

Read also: America First: President Trump’s First Week in Trade

“Maintaining strong business partnerships during uncertain times is crucial,” said Sam Burkhan, CEO of ITF Group. “Our advanced real-time systems, expert team, and customized logistics solutions help food and beverage distributors tackle challenges such as order inaccuracies, limited inventory visibility, and delivery inefficiencies. Beyond addressing immediate issues, we anticipate future concerns like potential tariffs to provide lasting support.”

Gartner’s Senior Research Director, Brian Whitlock, emphasizes that supply chain leaders should remain agile and invest in long-term strategies to navigate tariff impacts. “Long-term winners will reinvent business strategies, develop new capabilities, and make material investments to gain a competitive edge,” Whitlock noted.

ITF Group offers expansive warehouse space, advanced technology for real-time inventory tracking, and a dedicated customer service team. Their precise inventory management includes item scanning and location-specific tracking, ensuring seamless visibility into stock levels and outgoing orders.

One notable client, a food and beverage distributor specializing in shelf-stable products, achieved significant results with ITF Group: a 15% boost in inventory accuracy, an 8.6% improvement in shipment accuracy, a 13% reduction in less-than-truckload (LTL) shipping costs, and a 15.6% cut in inventory expenses. The distributor now delivers meals to correctional facilities nationwide with shipment accuracy at 99.92% and inventory accuracy at 99.85%.

“Each improvement helps our clients run more efficient operations, providing resilience during inevitable disruptions,” Burkhan added. “Our mission is to empower businesses with predictive inventory management, actionable insights, and scalable systems that support growth, even amidst market fluctuations.”

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APAA Backs 25% Tariff on Foreign Aluminum, Applauds Presidential Action

The American Primary Aluminum Association (APAA) has expressed strong support for President Trump’s recent Executive Order enforcing a 25% tariff on all foreign aluminum imports under the Section 232 program. This decisive move aims to bolster the U.S. aluminum industry by curbing the impact of unfair trade practices.

Read also: America First: President Trump’s First Week in Trade

“Today marks a significant victory for American aluminum workers,” said Mark Duffy, President of the APAA. “President Trump’s leadership in strengthening the Section 232 program will safeguard thousands of jobs and help revitalize the domestic aluminum sector, which has long suffered from global trade imbalances.”

The APAA highlighted that the tariff, applicable to all foreign aluminum imports, is designed to protect U.S. manufacturers from unfair competition and ensure the sustainability of the nation’s aluminum production capabilities. Industry leaders believe this measure will create a more level playing field and secure the future of American aluminum jobs and businesses.

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Week Three in Trade – First 100 Days of the New Administration

IEEPA Tariffs on China, Mexico, and Canada

We previously covered President Trump’s IEEPA tariffs and the various retaliatory tariff and nontariff countermeasures announced by each country in separate posts. Currently, the Mexico and Canada tariffs have been paused until March 10, and only the 10% tariffs on China are in effect.

Read also: Week Two in Trade – First 100 Days of the New Administration

Removal and Reinstatement of De Minimis Exemption for Low-Value Imports

Following President Trump’s removal of the de minimis exemption last week, on Friday, February 7, 2025, President Trump issued an amendment to his original Executive Order and temporarily reinstated the exemption until “notification by the Secretary of Commerce to the President that adequate systems are in place to fully and expediently process and collect tariff revenue for all Chinese products.”

It is unclear how long this pause will last. Once removal of the exemption resumes, such requests for de minimis entry and clearance will likely be rejected. U.S. Customs and Border Protection’s CSMS #63992482 previously provided guidance on how the duties would be enforced in the Automated Commercial Environment (“ACE”) system by mode of transportation and clearance type.

Export Controls & Sanctions

Russia

On February 5, 2025, Attorney General Pam Bondi issued a memorandum disbanding the inter-agency Task Force KleptoCapture—along with the Kleptocracy Team, and Kleptocracy Asset Recovery Initiative—which was created following Russia’s invasion of Ukraine to enforce the vast sanctions, export controls, and economic countermeasures imposed on Russia. The Task Force included prosecutors, agents, analysts, and professional staff from a variety of law enforcement agencies, and although it remains to be seen, its unwinding may signal a more relaxed approach to Russian sanctions enforcement or the prioritization of other foreign policy objectives.

Iran

In contrast, earlier in the week President Trump issued a National Security Memorandum (“NSM”) directing multiple U.S. departments and agencies—including the Commerce, Treasury, and Justice Departments—to escalate enforcement of the sanctions and related enforcement remedies against Iran. The NSM specifically directs the Treasury Department (through its Office of Foreign Assets Control) to conduct a “review for modification or rescission any general license, frequently asked question, or other guidance that provides Iran or any of its terror proxies any degree of economic or financial relief.”

Congressional Nominations

The Senate Commerce Committee voted 16-12 to move forward with President Trump’s nominee to head the Commerce Department, Howard Lutnick. While Lutnick stated he will make export control enforcement a top priority, he also indicated a review of controls on current items, including firearms and curtained advanced artificial intelligence semiconductors. Lutnick also plans to review whether the Bureau of Industry and Security is adequately funded. Lutnick’s nomination now moves to the full Senate.

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Stock Market Resilience Amidst Tariff Threats

The stock market continues to hold its ground near all-time highs, even with the looming threat of tariffs. For a detailed analysis, you can refer to the original article published on TKer.co.

Read also: Trump Administration’s Tariff Changes Could Hit Shein Harder Than Temu

Recent data from the IndexBox platform highlights how the U.S. economy remains resilient despite potential tariff challenges. As of January 2025, U.S. employers added an impressive 143,000 jobs, marking the 49th consecutive month of job growth. This robust hiring comes even as the unemployment rate ticked down to 4.0%, hovering near historical lows.

Despite potential headwinds, earnings growth has showcased significant strength, with nearly two-thirds of the S&P 500 companies reporting better-than-expected earnings for Q4. According to FactSet, EPS growth is on track to grow by 16.4% year-over-year, notably higher than the 11.8% initially forecasted by analysts.

Potential Tariff Impacts on Earnings

While investors remain cautious about the impact of tariffs on Mexico, Canada, and China, there is a silver lining as the direct effects of these tariffs have not yet been fully incorporated into companies’ earnings projections. Analysts like Goldman Sachs and BofA have quantified that tariffs could potentially reduce S&P 500 EPS by up to 8%—a significant figure worth monitoring.

Consumer and Business Sentiment

The University of Michigan’s consumer sentiment survey shows a drop in sentiment, reaching its lowest point since July 2024. This sentiment decline is pervasive across all political and demographic groups, underscoring apprehensions about potential tariffs. However, core consumer spending data reveals a contrasting reality. Reports from JPMorgan and BofA suggest that card spending per household is on the rise, indicating sustained consumer confidence.

Business investments are also trending at record levels. Orders for nondefense capital goods reflect a positive outlook as business confidence in the U.S. manufacturing sector reaches its highest point in nearly three years. Such upbeat sentiment is paired with an increase in service sector activity, albeit slower, attributed partially to adverse weather conditions disrupting initial growth in January.

Conclusion

While the threat of tariffs holds potential implications for future earnings, the U.S. economy’s broader resilience cannot be understated. Key sectors of business activity remain robust, and job creation continues to propel forward, indicating confidence among both employers and consumers. Nevertheless, the situation remains fluid, and market participants should keep a close eye on developments in tariff negotiations and broader geopolitical events.

Source: IndexBox Market Intelligence Platform  

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Week Two in Trade – First 100 Days of the New Administration

The week started off with President Trump threatening to put tariffs on Colombian goods entering into the United States. The tariffs were used as leverage against the Colombian government who initially refused to allow U.S. military planes carrying individuals deported from the United States to land in Colombia. Eventually, the United States and Colombia came to an agreement on how deported individuals would be transported to Colombia and no tariffs were imposed. While President Trump did not follow through on his threats to impose tariffs on Colombian goods, he maintained his stance on imposing tariffs on imports from Mexico, Canada, and China to take effect as early as February 1st and announced at a press conference on January 30th that the announcement was imminent and would be made over the weekend. Husch Blackwell’s International Trade and Supply Chain Team is monitoring this situation closely, however, there are not specific orders or proclamations confirming that this is more than a threat at the time of the posting of this trade update.

Read also: America First: President Trump’s First Week in Trade

 In a Press Briefing on January 28th, Press Secretary Leavitt also confirmed that President Trump is considering sectoral tariffs on certain sectors like pharmaceuticals, semiconductor chips, steel, aluminum, and copper. However, President Trump has not yet taken action to implement any of these tariffs.

Based on the first two weeks, it appears President Trump will use tariffs as a tool to pursue his foreign policy agenda and tariffs may replace sanctions to a certain extent.

Anti-Dumping and Countervailing Duty Changes

The antidumping and countervailing duty provisions in the America First memorandum were heavily debated this week. Of particular interest was the provision regarding “transnational subsidies, cost adjustments, affiliations, and ‘zeroing.’”  Zeroing is a concept where antidumping margins are calculated by disregarding those sales where there is no margin and only accounting for sales where margins are positive.  Zeroing was considered a violation of the WTO almost 20 years ago and the Department of Commerce which conducts these trade remedy investigations has utilized alternative margin analyses to calculate dumping margins since the mid-2000s. If the concept of zeroing is reinstated it may result in higher antidumping duty rates for exporters of goods to the United States because the margin calculation only relies on positive margins and does not provide the margin reducing benefit of factoring zero or negative margin transactions which bring the average antidumping duty margin down.  These proposals are still in discussions as many of these concepts would require revisions to the existing regulations governing the conduct of these proceedings.

Congressional Trade Actions

Over the last two weeks, Congress has also been focused on trade issues including reintroducing the de minimis bill for Section 301 goods and the Reciprocal Trade Act. The de minimis bill, reintroduced by Representative Murphy from North Carolina would prohibit the use of de minimis entry for imports that include products subject to Section 301 tariffs.

The Reciprocal Trade Act, introduced by Representative Moore, would authorize the president to negotiate with other countries on issues like tariffs. The bill would also allow the president to impose tariffs on foreign countries equal to any tariffs on U.S. goods imposed by those countries.

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Bitcoin Dips Below $95,000 Amid Tariff Concerns

Bitcoin (BTCUSD) slipped below the $95,000 mark on Sunday amidst rising apprehension over the economic consequences of new U.S. tariffs on imports from Canada, Mexico, and China, as reported by Yahoo Finance. These tariffs could potentially spur inflation, limiting the possibility of a Federal Reserve rate cut, and applying pressure on non-yielding assets such as bitcoin.

Read also: Bitcoin Poised to Break All-Time High Amid Shifting Economic Landscape

Recent data from the IndexBox platform indicates that since Bitcoin’s peak last month, the cryptocurrency has depreciated by approximately 15%, marking its third successive day of losses as of Sunday, while also touching a three-week low. Despite this downturn, Bitcoin still boasts a 35% increase since the early-November U.S. election, supported by optimism regarding potential strategic reserves and a favorable regulatory environment from a crypto-enthusiastic White House and Congress.

Crucial Price Levels to Monitor

Technical analysis suggests Bitcoin’s pricing is exhibiting a possible double top pattern, a classic indication of a downtrend. The RSI’s bearish divergence, despite Bitcoin reaching a slightly higher peak last month, suggests dwindling buying pressure.

Key technical levels include the $92,000 mark, offering robust support, which Bitcoin temporarily fell below but managed to regain late Sunday. If this support falters, the next crucial level is $87,000, aligning with a pennant pattern that developed after a surge post-election. A breach below this could drive Bitcoin towards $74,000, a potential entry point for long-term investors near the March 2024 high.

On the upside, investors should watch the $106,000 resistance area closely, coinciding with peaks in December and January. Breaking through this level with strong volume could invalidate the double top and sustain Bitcoin’s long-term upward trajectory.

Source: IndexBox Market Intelligence Platform  

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U.S. Tariffs on Foreign Imports: Revenue and Evasion Tactics

President Donald Trump’s newly imposed tariffs on foreign imports aim to generate significant revenue for the U.S. government by taxing goods from countries like Mexico, Canada, and China. However, the government’s ability to collect these tariffs is under scrutiny. According to a report by Goldman Sachs, exporters are finding ways to circumvent these financial barriers, potentially costing the U.S. billions in expected revenue.

Read also: Trump’s Sweeping Tariffs on Mexico, Canada, and China Trigger Global Trade Showdown

Last weekend, Trump announced a 25% tariff on imports from Mexico and Canada and a 10% tariff on goods from China. While these measures could potentially decrease the federal budget deficit, the practical challenges of tariff collection might impede this outcome. The IndexBox platform highlights potential revenue from these tariffs; however, Goldman Sachs reports suggest that ingenious tariff-evasion tactics could reduce this forecast by $30 billion.

The most prevalent method of evasion, as identified by Goldman Sachs, is “entrepot trade.” By rerouting goods through third-party countries unaffected by tariffs, exporters maintain their market presence while avoiding additional costs. This trend has been particularly observable in the growing trade statistics of India and Vietnam, which have both increased their exchanges with China while bolstering trade with the U.S.

Additional evasion strategies include underreporting the value of goods or mislabeling products to fit lower tariff categories. The variation in tariff rates across countries and products further incentivizes these practices. As tariffs become more widespread, these methods of circumvention highlight the complex challenges in enforcing trade policies.

Source: IndexBox Market Intelligence Platform  

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Statement from American Association of Port Authorities (AAPA) on Potential New Tariffs

The American Association of Port Authorities (AAPA) today released the following statement in anticipation of new tariffs from the Trump Administration:

Read also: Trump’s Sweeping Tariffs on Mexico, Canada, and China Trigger Global Trade Showdown

“Tariffs are taxes,” stated Cary S. Davis, AAPA President and CEO. “Though the port industry supports President Trump’s efforts to combat the flow of illicit drugs, tariffs will slow down our supply chains, tax American businesses and increase costs for hard-working citizens. Instead, we call on the Administration and Congress to thoughtfully pursue alternatives to achieving these policy goals and exempt items critical to national security from tariffs, including port equipment.”

About AAPA

The American Association of Port Authorities (AAPA) is the unified voice of port leaders and maritime industry partners across the Western Hemisphere who serve a vital role in job-creation, international competitiveness, and economic prosperity. Connecting small business owners, retailers, and manufacturers to the global marketplace, AAPA member organizations advocate for national policies and infrastructure investments in support of a resilient global supply chain and a positive impact on the way people live, work, travel, and engage in commerce.