Liberation Day, One Year Later

A very special Understanding America collector’s edition

Next Thursday, April 2, marks one year since President Trump stood in the Rose Garden and declared “Liberation Day,” promising that American industry would be revitalized and the terms of global trade rewritten. Since then, his administration has moved with unusual speed and ambition. Here at Understanding America we’ve done our best to document developments, big and small. Next week, Commonplace will publish a series of reflections on what has happened and what must come next.

To mark the anniversary, we wanted to use this week’s newsletter installment to take stock—think of it as a Very Special Collector’s Edition. If you’ve been following along every week and have an instant recall of a year’s rapid developments across countries and sectors, well then we’ve got nothing new for you here. But that’s more than we can say for ourselves. We found assembly of the full picture to be extraordinarily valuable, noticing themes and connections that had escaped us, and we hope you will too.

What follows is a country-by-country and sector-by-sector account of Liberation Day, broadly defined. It covers not only tariff policy and bilateral trade agreements, but also the investment commitments extracted from trading partners and major companies, the government’s expanding role in industrial policy and financing, and the defense industrial base’s renewed commitment to capital investment under pressure from the administration. It is not comprehensive—much more has happened than can fit in one document—but it covers the major developments for the major trading partners and the sectors most directly implicated by the new international trading order.

President Trump made his administration’s theory of the case clear on Inauguration Day when he signed the America First Trade Policy memorandum, ordering a government-wide review of our trading partners’ unfair trade practices, the impact of large and persistent trade deficits, and other areas where he believed the United States had surrendered too much leverage over the terms of trade. The core argument was that, to be free and fair, trade must be balanced: persistent trade deficits in goods, combined with foreign tariffs and non-tariff barriers, had hollowed out U.S. manufacturing capacity, weakened domestic supply chains, and threatened our national security.

To move quickly, President Trump invoked the International Emergency Economic Powers Act—a novel use of an emergency statute that had never before provided the basis for tariffs. The resulting trade agenda unfolded in stages. The reciprocal tariffs announced on Liberation Day took effect in early April; however, shortly thereafter, the administration suspended the higher country-specific rates for most partners and replaced them with a 10% global tariff while opening space for bilateral negotiations. When that pause expired, country-specific reciprocal rates resumed in August at adjusted levels. At the same time, the administration pursued a parallel track with national-security trade actions under Section 232 of the Trade Expansion Act of 1962 in sectors such as steel, aluminum, autos, semiconductors, pharmaceuticals, and copper, while separately moving to eliminate duty-free de minimis treatment for low-value imports.

In practice, the reciprocal tariffs became less a static schedule than an instrument of negotiation. The leverage that they created provided the impetus for a series of bilateral Agreements on Reciprocal Trade, or ARTs. The administration has since signed ARTs with Malaysia, Cambodia, El Salvador, Guatemala, Argentina, Bangladesh, Taiwan, Indonesia, and Ecuador, and announced framework deals with the European Union, India, Japan, South Korea, Switzerland, Thailand, the United Kingdom, Vietnam, and others—covering the majority of U.S. trade. Review and renegotiation of the U.S.-Mexico-Canada Agreement (USMCA) is now underway.

In February, the Supreme Court held that the IEEPA authority to “regulate … importation” does not include tariffs, invalidating the reciprocal and fentanyl tariffs imposed under the statute. In response, President Trump terminated the IEEPA tariffs, imposed a temporary 10% surcharge under Section 122 of the Trade Act of 1974 (which expire in July), and moved to preserve the broader strategy through new investigations under Section 301 of the Trade Act of 1974, ongoing and new Section 232 cases, and the bilateral agreements already negotiated under the shadow of the reciprocal tariff regime. As we explained in “Keep Calm, the Tariffs Are On,” the Court’s decision had little substantive effect on the administration’s trade agenda. One consequence, however, is that countries that negotiated a higher reciprocal rate now pay only the 10% Section 122 surcharge on most goods, absent product-specific exclusions or higher Section 232 rates. That gap will persist until the administration deploys a new tariff authority.

And that is where the United States finds itself now: not a finished settlement but an active campaign on favorable terrain, with a range of obstacles but a strategic logic that remains intact.

COUNTRY ANALYSIS

CHINA

• China’s Trade Surplus Climbs Past $1 Trillion for First Times | New York Times

• Trump’s Tariffs Send US Trade Deficit With China to 21-Year Low | Bloomberg

• The American and Chinese Economies Are Hurtling Toward a Messy Divorce | Wall Street Journal

• Why China Is Doubling Down on Its Export-Led Growth Model | Financial Times

• China’s Growth Target Is a Global Problem | Financial Times

• On Trade, China Isn’t As Strong as It Looks | Commonplace

• On China, Our Trading Partners Have Only One Choice | Commonplace

Even before Liberation Day, the average U.S. tariff on Chinese goods had already reached almost 40% after IEEPA actions in February and March 2025 over China’s role in the fentanyl supply chain were layered by President Trump atop his first-term Section 301 tariffs. Liberation Day pushed the effective rate far higher, and the ensuing tit-for-tat escalation drove U.S. tariffs on China above 145% and Chinese tariffs on U.S. goods above 125% by mid-April. In May, the two sides agreed to a ceasefire, cutting net tariff additions in 2025 to 30% and 10%, respectively, for 90 days. The first-term Section 301 tariffs remained in effect.

The truce did not end the confrontation. In October, the United States moved to expand the list of Chinese companies targeted by export controls, China responded with broader and tighter export controls on rare earths and magnets, and Trump then threatened 100% tariffs and new software restrictions. Meeting in Busan, Korea, Presidents Trump and Xi reached a second detente that reduced tariffs again, withdrew the expansion of U.S. export controls, deferred China’s expanded export controls for a year, and paused several other non-tariff escalations on both sides. The power of China’s critical-minerals chokehold, perceived by some as the trump card in the economic conflict, brought the sector into focus alongside semiconductors as the highest-priority supply chains for rapid reshoring.

As the primary driver of global imbalances, the Chinese export machine has been a key focus of the administration’s policy. China suppresses domestic consumption, overproduces manufactured goods, and relies on foreign markets to absorb the surplus—an economic model that delivered a record $1 trillion trade surplus in 2025 even as Chinese exports to the United States fell by nearly one fifth. By late 2025, China’s share of U.S. imports had fallen to roughly 7.5%, erasing more than two decades of growth since China’s ascension to the WTO at the turn of the century. Rather than landing in the United States, China’s surplus has flowed into Europe, Southeast Asia, and other markets, threatening their industrial bases and forcing them to choose: capitulate to China’s industrial dominance or join the United States in raising barriers against it.

That basic logic has shaped the entire trade agenda. The administration’s reciprocal trade agreements, tighter rules of origin, anti-circumvention provisions, and pressure on partners not to serve as waystations for Chinese goods are all China policy by other means. At the same time, as the semiconductor and shipbuilding sections show, the administration has been softening its posture toward China in important respects, cutting against the broader strategy. The oscillation between maximal pressure and negotiated reprieve has been a defining feature of the second-term trade war.

In March, U.S. officials met their Chinese counterparts in Paris to discuss tariff arrangements, agricultural and critical minerals purchases, and proposals for formal mechanisms to manage the commercial relationship. A summit in Beijing between Presidents Trump and Xi, postponed from the end of March due to the war in Iran, is currently scheduled for mid-May.

UNITED KINGDOM

• The Art of the Possible: Britain Settles for Quick Win in US Trade Deal | Reuters

• US-UK Trade Deal Squeezes China Supply Chains | Financial Times

• Trump Tells U.K. and Canada That Boosting Trade With China Is ‘Dangerous’ | New York Times

• U.S., U.K. Strike Deal on Higher Drug Prices | Wall Street Journal

In May, the UK became the first major trading partner to negotiate a post–Liberation Day agreement, which left a baseline 10% tariff in place while providing relief in selected sectors. Most notably, the first 100,000 vehicles imported annually from the UK face the 10% rate; additional autos face the 25% rate. The June implementing order provided relief for certain aerospace products and set terms for a broader Economic Prosperity Deal rather than a full trade agreement.

The precedent this set is notable: even close allies must negotiate for market access, and any relief comes in narrow, negotiated carveouts. The UK avoided the eventual increase in steel and aluminum tariffs on other countries from 25% to 50%, but did not secure full metals relief; any future cuts will be tied to U.S. demands on supply-chain security (i.e. limiting China-related exposure). The UK is subject to the administration’s Section 301 investigation into forced labor, though not the overcapacity probe.

December brought an agreement in principle on pharmaceutical pricing, under which the UK would raise net prices paid for new medicines by 25%, while the United States agreed to exempt UK-origin pharmaceuticals, ingredients, and medical technology from future Section 232 tariffs and not to target UK pricing practices in future Section 301 investigations during the president’s term. A February MOU concerns building more secure non-Chinese supply chains for critical minerals.

EUROPEAN UNION

• Europe Got Tough With Trump, but It Needs the U.S. as Much as Ever | Wall Street Journal

• Europe’s China Shock Worsens as Trade Deficit Widens | Politico

• How Germany Fell Out of Love with China | The Economist

• French Advisers Urges EU Tariffs or Weaker Euro to Counter China | Reuters

The U.S.-EU framework, reached in July, set a 15% tariff on most EU goods—including autos, pharmaceuticals, and semiconductors—down from the 20% reciprocal rate announced on Liberation Day. Tariffs on steel, aluminum, and copper remained at 50%, with future relief tied to joint action on supply chains and overcapacity. In exchange, the EU agreed to eliminate tariffs on U.S. industrial goods, provide preferential access for U.S. agricultural exports, and address longstanding non-tariff barriers. An August joint statement included commitments on $750 billion in U.S. energy purchases through 2028, $600 billion in EU investment in the United States, defense procurement increases, strong rules of origin to ensure the agreement’s benefits accrue to the United States and the EU rather than third countries, and economic security cooperation. September’s implementing notice zeroed out duties on EU-origin aircraft, generic pharmaceuticals, and natural resources unavailable in the United States.

The EU deal may be the most structurally fragile of the recent investment agreements. The energy pledge depends on private buyers, while the $600 billion investment target carries no legally binding commitment and is difficult for Brussels to direct or enforce. After months of delay amid broader tensions with the United States—including Trump’s threats over Greenland and the uncertainty following the Supreme Court’s IEEPA decision—the European Parliament voted in March to advance the implementing legislation. The measure now moves to negotiations with member governments, with a final parliamentary vote expected no earlier than June. In the meantime, the EU is subject to the administration’s new Section 301 investigations, covering structural manufacturing overcapacity and failures to enforce forced-labor import bans.

In June 2025, NATO members committed to spending 5% of GDP in defense and defense-related spending by 2035. A trilateral critical-minerals partnership with the EU and Japan, announced in February 2026, aims at supply-chain resilience, including a possible plurilateral trade initiative with tools such as border-adjusted price floors.

JAPAN

• Inside Trump’s $550bn ‘Shakedown’ of Japan Inc | Financial Times

• Trump Hails Japan’s First Batch of U.S. Investments | New York Times

• Japan to Spend Nearly $63 billion In Second Phase of US Investment | Reuters

• The Global Industrial Development Toolkit: Unpacking Trump’s Investment Deals with Japan and South Korea | American Affairs

The July trade and investment agreement with Japan subjects nearly all imports from Japan to a baseline 15% tariff, down from the 24% reciprocal rate announced on Liberation Day. The 27.5% tariff rate on autos also fell to 15%—a significant change for an export economy heavily reliant on autos. In exchange, Japan agreed to provide greater market access for American producers, including large purchases of U.S. agricultural and energy products, 100 Boeing aircraft, and billions in defense equipment, while it also accepted U.S. automotive safety standards for vehicles sold in the Japanese market. Japan is subject to both of the administration’s new Section 301 investigations, covering structural overcapacity and failures to enforce forced-labor import bans.

But the real novelty was the creation of an allied-financing mechanism for American industrial policy. A September MOU commits Japan to a $550 billion capital infusion into U.S. strategic industries through January 2029. The structure is asymmetric: the United States selects the projects, Japanese capital funds them, and the overwhelming share of returns ultimately flows to the United States. Japan can decline specific investments, but doing so risks forfeiting preferred distributions and prompting renewed tariff pressure. By October, Japan had identified up to $390 billion in potential projects; in February, the first $36 billion tranche was announced.

Critical mineral coordination shows the broader strategic logic of the partnership. An October framework focused on financing, stockpiling, mining, and processing to secure an alternative supply of critical minerals outside China. In February, that effort widened into a trilateral track with the European Union and Japan, with action plans to develop new coordinated trade tools and to broaden plurilateral cooperation. Further steps were announced in March 2026.

SOUTH KOREA

• Samsung and Other South Korean Firms Pledge Larger Domestic Investments after U.S. Tariff Deal | CNBC

• Understanding the $350 Billion MOU Putting Seoul Under Pressure | Korea Economic Institute of America

• The Global Industrial Development Toolkit: Unpacking Trump’s Investment Deals with Japan and South Korea | American Affairs

A July 2025 preliminary deal with South Korea, later expanded to include a $350 billion investment framework, placed a 15% tariff on Korean goods, down from a 25% reciprocal rate announced on Liberation Day. Sector-specific caps ensure Korean automakers, pharmaceutical producers, and chipmakers receive rates no less favorable than those offered to competing exporters. In exchange, Korea agreed to ease market access for American producers by removing a 50,000-unit cap on qualifying U.S.-made cars, reducing emissions paperwork, streamlining approvals for agricultural biotechnology products, and pledging non-discrimination against U.S. digital firms. Also included: a 103-aircraft Boeing order and an additional $150 billion in private foreign direct investment from Korean companies during President Trump’s second term. As with Japan, South Korea is subject to both of the administration’s new Section 301 investigations.

As with Japan, the real novelty was the extension of the allied-financing model. The package totals $350 billion, with $150 billion earmarked for U.S.-approved shipbuilding investment—turning one of Korea’s industrial advantages into a pillar of the administration’s maritime revitalization. The other $200 billion is tied to an investment MOU for strategic sectors. Like Japan’s, the structure is asymmetric: the United States selects projects, Korea funds them, and after investments break even 90% of distributions flow to the United States. Korea secured protections Japan did not: a $20 billion annual funding cap, greater reliance on loans and guarantees, and a consultative role in project review. But the leverage remained clear. After delays in Korea’s implementing legislation, January tariff threats were followed by March legislation authorizing a public corporation to manage the promised investments.

TAIWAN

• Taiwan and TSMC Rush to Head off Donald Trump’s Tariff Threat | Financial Times

• US and Taiwan Reach Trade Deal, with Semiconductor Chips and China in Focus | Reuters

• Taiwan Reaches Trade Deal With Trump and Pledges More U.S. Chip Factories | New York Times

Taiwan’s Liberation Day rate was 32%, reset to 20% when country-specific tariffs resumed in August. A January investment MOU and February trade agreement then capped the reciprocal tariff on most Taiwanese goods at 15%, set future Section 232 treatment on Taiwanese auto parts, timber, and lumber at no more than 15%, and zeroed out reciprocal duties on generic pharmaceuticals, aircraft components, and natural resources unavailable in the United States. Taiwan zeroed out tariffs on over 6,300 U.S. products, and agreed to accept U.S.-standard vehicles and FDA-approved medical devices and facilitate roughly $85 billion in purchases of U.S. liquified natural gas and crude oil, power equipment, and civil aircraft and engines through 2030. Taiwan is also among the economies targeted by the administration’s new Section 301 probes into overcapacity and forced-labor enforcement.

The deal was principally structured around semiconductor reshoring. Taiwanese firms committed at least $250 billion in direct investment and at least $250 billion in credit guarantees to support additional investment in the United States in semiconductors, energy, and AI. The agreement tied future semiconductor Section 232 relief directly to domestic buildout: Taiwanese firms constructing new U.S. capacity may import up to 2.5 times that planned capacity without paying Section 232 duties during construction; firms that complete new U.S. projects may import up to 1.5 times their new U.S. capacity duty-free. The agreement links trade treatment to economic-security alignment. The United States reserves the right to consider Taiwan’s cooperation on export controls, investment reviews, and shared national-security concerns when granting future preferential treatment—and can terminate it if Taiwan enters a new preferential agreement with a covered nation, such as China.

INDIA

• Trump’s Surprise Trade Deal With India Resets Fractured Ties | Bloomberg

• Trump and India Call Off Their Trade War, but the Terms of Peace Are Murky | New York Times

India’s Liberation Day rate was 26%. By August, it faced a 25% reciprocal tariff under IEEPA plus a 25% tariff because of continued purchases of Russian oil, pushing the headline rate on many products to 50%. Here, the administration was using tariffs to pursue foreign policy objectives beyond balanced trade. Consequently, India faced among the heaviest tariff pressure of any trading partner.

A February 2026 interim, nonbinding deal released the pressure. The United States removed the Russia-related tariff and lowered India’s reciprocal tariff to 18%; India committed to stop buying Russian oil and expand market access for U.S. exports. India agreed to eliminate or reduce tariffs on industrial goods and a range of agricultural products, address non-tariff barriers in priority areas, establish rules of origin to prevent third-country circumvention, and develop bilateral digital-trade disciplines. The package also included U.S. commitments on specific sectors, including tariff relief for aerospace goods, autos and parts, and pharmaceuticals. Tariff relief for India was paired with monitoring and a possible snapback if Russian oil purchases resumed, though the administration will need to use a different authority to retain the pressure absent IEEPA authority. India is subject to both of the new Section 301 investigations, covering structural overcapacity and failures to enforce forced-labor import bans.

The administration says India intends to purchase more than $500 billion in U.S. energy, information and communications technology, coal, and other products over five years (though such figures may be aspirational; India bought around $40 billion in U.S. goods in 2024). Unlike Japan and South Korea, India didn’t offer an investment package, and domestic politics—especially regarding the agricultural sector—limited the concessions it could make.

NORTH AMERICA

• Bessent Urges Canada, Mexico to Match US tariffs on China as Deadline Looms | CNBC

• Trump’s Tariff Threats Freeze Out BYD and Other Chinese Firms in Mexico | Bloomberg

• Mexico to Raise Tariffs on Imports From China After US Push | Bloomberg

• Lighthizer Has Bad News for Mexico | Bloomberg

• No Pain, No Gain on Canada and Mexico Tariffs | Commonplace

• Canada Doesn’t Have the Cards | Understanding America

For North America, President Trump’s second-term trade war began before Liberation Day. In February 2025, citing concerns relating to fentanyl and immigration, his administration imposed IEEPA tariffs of 25% on goods that did not claim and qualify for USMCA preference. That same structure persisted after Liberation Day and the later pivot to Section 122, with USMCA-compliant goods remaining exempted from the broader tariff action. The practical effect was to make USMCA more valuable, not less: more trade was pushed under its terms, turning it into the operating platform for regional trade even as tariff pressure intensified around it. Estimates indicate that 85% of imports from Mexico and Canada claimed USMCA preference in January, up considerably from a year before. Both countries face separate Section 232 actions on steel and aluminum, autos, and medium- and heavy-duty trucks (with USMCA-compliant trucks and parts receiving narrower treatment based on their U.S. content).

The administration has made a common regional demand: neither Mexico nor Canada can serve as an export hub for China and other non-market economies into the U.S. market. Likewise, it has signaled interest in building a “fortress North America” by tightening rules of origin, limiting third-country content, and reducing imports from non-market economies. That strategic logic will inform this summer’s USMCA sunset review. The stakes are high; Trump has mused about replacing USMCA and pursuing separate bilateral deals with Mexico and Canada

Mexico

Mexico is further along in adapting to the new U.S. economic framework. In December, it authorized tariffs of up to 50% on goods from countries with which it has no trade agreement, including China, signaling willingness to align more closely with the U.S. push to keep non-market-economy content out of North American supply chains. Bilateral talks began in March ahead of July’s Joint Review, putting Mexico ahead of Canada as the administration moves to tighten rules of origin and harden the region’s trade perimeter. Washington is pressing Mexico on discriminatory energy policies, biotech corn, and unresolved digital and customs barriers. In February, the two governments launched a first-of-its-kind Action Plan for critical minerals focused on coordinated trade tools, stockpiling, project development, and possible border-adjusted price floors. Mexico is nonetheless named in both Section 301 investigations.

Canada

Canada enters the review from a weaker and less settled position than Mexico. The administration is demanding movement on dairy access, digital rules, discriminatory procurement, customs frictions, and tighter regional rules of origin, alongside stronger alignment against non-market economies. Bilateral relations have been rocky; pressure deepened after Prime Minister Mark Carney’s Davos speech in January—which urged middle powers to resist American dominance—and after Carney’s subsequent move to open Canada’s market to Chinese autos as part of a “new strategic partnership.” Both actions drew strong criticism from the administration. U.S. and Canadian officials are only expected to begin formal USMCA review meetings in the coming weeks. Canada is subject to the administration’s Section 301 investigation into forced labor, but not the overcapacity probe.

SECTORAL ANALYSIS

CRITICAL MINERALS

• America Gave Away Rare Earths | Commonplace

• Pentagon to Take Stake in Rare-Earth Company, Challenging China’s Control | Wall Street Journal

• New ‘Project Vault’ Critical Minerals Stockpile Is ‘First Step of Many’ Needed for U.S. to Break China’s Supply-Chain Chokehold | Fortune

China’s chokehold on critical minerals and rare earths has been in constant focus since Liberation Day. The real bottleneck is not the rocks themselves, but the refining, separation, and magnet-making capacity that transforms them into industrial inputs. China spent decades building dominance through state-directed industrial strategy and acquiring foreign competitors.

As the tit-for-tat trade war between the United States and China escalated in April 2025, China imposed export controls on rare earth elements and magnets; in October, it tightened those controls further to cover products tied to mining, processing, and magnet-making. Together, the measures created a licensing regime broad enough to disrupt global manufacturing. Shortly thereafter, Presidents Trump and Xi struck a detente that prevented a de facto trade embargo; however, the underlying vulnerability had been exposed for all to see.

In response, the administration took action across nearly every lever of federal power. In February, Trump unveiled Project Vault, a public-private critical minerals reserve designed to give manufacturers a buffer against supply shocks. That same week, Secretary of State Rubio convened a Critical Minerals Ministerial with 54 countries, during which Vice President Vance proposed a preferential trade zone protected by enforceable price floors. The same day, USTR announced a U.S.-Mexico Action Plan and a separate track with the European Union and Japan, while the State Department signed an MOU with the United Kingdom and announced the United States has mobilized more than $30 billion to build critical mineral capacity through loans, exploration deals, stockpile purchases, and direct equity stakes, including a $400 million equity deal with MP Materials backed by a 10-year price floor and magnet offtake agreement.

DEFENSE INDUSTRIAL BASE

• You Can’t Spell ‘Defense Industrial Base’ Without ‘Industrial Base’ | Understanding America

• ‘There’ll Be Consequences’: Trump WH Warns Defense Contractors | RealClearPolitics

• US Defense Firms Boost Spending After Trump Calls for Expedited Arms Deliveries | Reuters

• Pentagon Headhunting Goldman, JPMorgan Bankers for ‘Economic Defense Unit’ | Semafor

For years, major defense contractors returned far more capital to shareholders through buybacks and dividends than they reinvested in production capacity. In January, President Trump directed the Department of War to identify contractors that underperform on delivery, underinvest in capacity, or prioritize shareholder payouts over government production needs. Such contractors face a prohibition on buybacks until they deliver “a superior product, on time and on budget,” while future contracts must tie executive compensation more closely to production performance. Capital expenditures are now expected to rise by more than a third this year; allied demand is also expanding. In June, NATO members committed to spending 5% of GDP on defense by 2035, and bilateral frameworks with the EU, Japan, and South Korea each include commitments to increase procurement of U.S. military equipment.

In November, the Pentagon unveiled a new acquisition architecture that concentrated authority in new Portfolio Acquisition Executives, replaced analyses of alternatives with competitive prototyping, expanded other transaction authorities, cut documentation to statutory minimums, and aims to provide “investable demand signals” such as multi-year procurements, guaranteed purchase orders, and long-duration contracts to catalyze private investment. The Department of War has also begun recruiting for a new Economic Defense Unit to help deploy expanded financing authorities across six key portfolios. Together with the Office of Strategic Capital’s expanded lending authority—reportedly up to $200 billion over several years—the administration is turning the Department into a more active investor in the industrial base on which it depends.

SHIPBUILDING

• Trump Wants the U.S. Shipbuilding Industry to Be Great Again. Here’s What It Will Take | CNBC

• White House Outlines Trump Plan for Shipping Industry | New York Times

• Trump’s Shipbuilding Imperative | Commonplace

• Rebuilding America’s Sea Power | American Affairs

In April 2025, President Trump signed an executive order on “restoring America’s maritime dominance,” noting that decades of neglect had left the United States building less than 1% of the world’s commercial ships while China produced roughly half. China’s shipbuilding capacity is higher by more than 20,000%.

The administration imposed Section 301 port-entry fees on China-operated and Chinese-owned vessels, as well as on operators using Chinese-built vessels, which were finalized in April, modified in October, and then suspended for a year in November after the U.S.-China detente. The effort provides a good illustration of how aggressive the administration was willing to be, and the difficulty of sustaining escalation in sectors that China dominates.

A February 2026 Maritime Action Plan fulfilled the 2025 EO, calling for a Maritime Security Trust Fund to provide durable funding, Maritime Prosperity Zones (modeled on Opportunity Zones) to channel domestic and allied capital into shipyards, and stronger enforcement against transshipping cargo through Mexico or Canada to evade U.S. fees. It also proposed a “Bridge Strategy” under which the first ships in a multi-ship contract could be built in allied foreign yards while direct investment simultaneously expands U.S. production capacity. The objective is to use trade leverage and allied cooperation to rebuild an industry the United States cannot revive on its own. Bipartisan legislation introduced in April 2025 proposed many of the same tools.

The Action Plan called for international agreements linking market access to joint industrial development, and singled out South Korea and Japan as central to revitalizing U.S. shipbuilding. The South Korea deal included $150 billion in U.S.-approved shipbuilding investment, alongside a working group on shipyard modernization, workforce development, maintenance and repair, and supply-chain resilience.

SEMICONDUCTORS

• Trump, Intel Agree to 10% U.S. Stake as President Promises More Deals | Wall Street Journal

• TSMC is Set to Expand Its $165 Billion U.S. Investment | CNBC

• TSMC to Delay Japan Chip Plant and Prioritize U.S. to Avoid Trump Tariffs | Wall Street Journal

• Trump Sets Up ‘Pax Silica’ Fund to Reduce Global Dependencies | New York Times

• Trump Administration Delays Tariffs on Chinese Semiconductors | New York Times

The United States had already embraced industrial financing of semiconductors before Liberation Day. The CHIPS Act has remained operative and the administration layered trade leverage over that existing subsidy pipeline. In April 2025, President Trump initiated a Section 232 investigation into semiconductors, semiconductor manufacturing equipment (SME), and derivative products. A January 2026 proclamation implements an immediate 25% tariff on a narrow category of advanced chips and derivatives that do not contribute to domestic semiconductor manufacturing capacity while deferring broader action.

As with autos and pharmaceuticals, the Section 232 action became leverage in bilateral talks. Taiwan’s agreement capped most reciprocal tariffs at 15%, and tied future semiconductor tariff relief directly to expanding U.S. capacity. South Korea secured a guarantee that future semiconductor tariffs would be no less favorable than those offered to a later major chip partner, while Japan’s $550 billion investment vehicle explicitly targeted semiconductor manufacturing and research.

In August, the administration converted remaining CHIPS support for Intel into an $8.9 billion equity investment that granted the government a 9.9% passive stake. In December, it launched Pax Silica, a State Department initiative to build trusted semiconductor and silicon supply chains with allies. In March, the Department said it would work with Congress to launch a $250 million Pax Silica Fund to support that effort.

As with shipbuilding, however, sustaining pressure on China on semiconductors has proved difficult: in December, the administration delayed new Section 301 semiconductor tariffs on China for 18 months as part of the broader detente, illustrating the tension between industrial strategy and managing an unstable relationship.

PHARMACEUTICALS

• Global Drugmakers Rush to Boost US Presence as Tariff Threat Looms | Reuters

• Eli Lilly Plans at Least $27 Billion in New U.S. Manufacturing Investments | CNBC

• AstraZeneca Unveils $50 Billion US Investment as Pharma Tariff Threat Looms | Reuters

In April, President Trump initiated a Section 232 investigation into imports of finished drugs, active pharmaceutical ingredients (APIs), and related products. In September, he threatened 100% tariffs on branded drug imports from companies without U.S. factories under construction, turning a live Section 232 investigation into a tool for inducing domestic investment commitments. The administration then delayed the tariffs to negotiate lower drug prices with manufacturers that also invest in U.S. production.

The strategy for supply-chain resilience and domestic production extended beyond tariffs. In May, Trump signed an executive order on regulatory relief to promote domestic production of critical medicines, aimed at accelerating approvals and removing barriers to reshoring. In August, he ordered the filling of the Strategic Active Pharmaceutical Ingredients Reserve, arguing that stockpiling APIs and their inputs could protect the United States from foreign disruption and strengthen domestic pharmaceutical manufacturing.

The domestic manufacturing push was paired with a broader campaign to reduce prices. In May, Trump issued an executive order to develop a most-favored-nation (MFN) policy for prescription drugs, arguing that Americans pay far more than patients in other rich countries, effectively subsidizing global innovation. In July, the administration sent letters to manufacturers urging negotiations; in September, it announced the first series of MFN agreements; and by February, it said it had announced 16 agreements, alongside the launch of TrumpRx.gov.

AUTOS

• Volvo to Build New Hybrid Car to Meet U.S. Demand and Avoid Tariffs | New York Times

• Stellantis Unveils $13 Billion U.S. Investment Plan | New York Times

• South Korea’s Hyundai Motor Increases U.S. Investment to $26 Billion | Wall Street Journal

• GM Wants Parts Makers to Pull Supply Chains from China | Reuters

• Tesla Wants Its American Cars to Be Built Without Any Chinese Parts | Wall Street Journal

On autos, a first-term Section 232 threat became a second-term tariff reality. An investigation initiated in 2018 concluded the following year that imported autos and parts impaired national security; however, President Trump never imposed tariffs, instead using tariff threats as leverage in USMCA negotiations. That changed in March 2025 when the administration imposed a 25% tariff on imported passenger vehicles and auto parts.

North American trade, including USMCA-compliant goods, was not fully spared. For USMCA-qualifying autos and parts, the 25% duty applies only to non-U.S. content (for parts, the process for calculating that share remains pending). As with other sectoral actions, these tariffs became bargaining chips in reciprocal trade talks. The UK secured a 10% total rate on the first 100,000 vehicles, while the EU, Japan, and South Korea each reduced their rate to 15%. In October, the administration imposed Section 232 tariffs on medium- and heavy-duty trucks, parts, and buses, again at 25%, again applied only to non-U.S. content.

This tariff action has prompted investment commitments. Toyota agreed to export U.S.-made vehicles to Japan, Korean automakers accelerated U.S. production plans, and the EU committed to mutual recognition of US automotive standards. Separately, the One Big Beautiful Bill Act repealed the Inflation Reduction Act’s clean vehicle tax credits, removing the subsidy architecture that had been steering capital toward domestic electric vehicle production and reshaping the investment landscape for automakers planning expansions. The legislation also provided a new deduction for interest on auto loans for U.S.-assembled vehicles.

STEEL, ALUMINUM, AND COPPER

• Trump’s Steel Tariffs Are Triggering Counterstrikes From US Neighbors Against China | Bloomberg

• E.U. Proposes 50% Steel Tariffs as Trump Effect Ripples Around World | New York Times

• Trump Invokes ‘Golden Share’ to Block U.S. Steel Plans for Illinois Plant | Wall Street Journal

• U.S. Steel to Restart Blast Furnace at Plant Trump Pushed to Preserve | Wall Street Journal

• U.S. Getting Its First New Aluminum Production Plant in Nearly 50 Years | Design & Development Today

With steel and aluminum, President Trump converted a Section 232 action from his first term into a broader industrial weapon. The tariffs began in 2018 but, by the end of the Biden administration, they had been reduced via country-specific quotas and product exemptions. In February 2025, the Trump administration restored them to full force—resetting steel at 25% and raising aluminum to 25%, ending country exemptions, tightening origin rules, and expanding coverage to more downstream products. In June, the administration doubled both tariffs to 50%, arguing that the earlier rates had not restored the capacity utilization needed for national defense. It also widened the tariffs to cover additional downstream and derivative goods, including household appliances and certain auto parts. Meanwhile, in July, Trump imposed a 50% tariff on semi-finished copper products and intensive copper derivative products under Section 232.

Action on metals widened beyond tariffs into direct state participation. In June 2025, the administration approved Nippon Steel’s controversial acquisition of U.S. Steel, but only after receiving a “golden share” through a national security agreement. The golden share gives the U.S. government extraordinary rights over a wide range of corporate decisions, including plant closures, offshoring, major capital investments, and changes to production commitments—an atypical level of control in a private-sector transaction. In September, Trump used that authority to block U.S. Steel from halting production at its Granite City, Illinois plant.

Enjoy the weekend!