In a February 13, 2025 memorandum, President Trump ordered his cabinet and economic policy advisors to further study the impacts of foreign trade, tax, and regulatory policies on U.S. trade deficits. This memorandum adds to the list of reports ordered by the president’s January 20 “America First Trade Policy” memorandum, but takes no action to impose tariffs on U.S. trade partners.  

The U.S. trade deficit is a genuine economic problem, but there is no serious economic evidence suggesting that non-reciprocal tariff treatment is a driver of this deficit. Further, the memorandum makes no mention of two very key asymmetries in the global trading system that likely have far more effect in driving trade flows than non-reciprocal tariffs: the lack of worker rights enforcement and environmental protections that encourage offshoring and put U.S. industry at unfair competitive advantage and suppress U.S. wages. 

The heavy volume of trade-focused executive orders have not produced substantive changes to U.S. trade policy, but they do come with a cost – the economic uncertainty created by the tariff threats that preceded this memorandum. The uncertainty over future trade costs contributes to expectations of inflation; inflation expectations, in turn, can lead to realized actual future inflation. The lack of certainty in policy and economic expectations deter manufacturing businesses from making capital investments in plant and research and development requiring many years to realize returns of investment. Furthermore, repeated threats and uncertainty undermine the credibility of U.S. policymakers not only in commercial dealings, but in all foreign relations, and erode the goodwill and soft power that the United States enjoys with foreign partners.  

Impact: The reciprocal tariff memorandum orders more government studies instead of offering a strategy to make trade work for U.S. workers by fixing a failed, corporate-led trading system.