The Trump Executive Orders on North American Tariffs: Implications for USTR’s Role in Trade Policy
February 3, 2025
The flags of Mexico, the United States, and Canada fly in Ciudad Juarez, Mexico, February 1, 2025 / Jose Luis Gonzalez / Reuters
President Donald Trump’s recent executive orders, based on the International Emergency Economic Powers Act (IEEPA) imposing tariffs effective at midnight, Feb. 3rd on Canada (25% general, 10% energy), Mexico (25%), and China (10%), mark a significant escalation in the use of trade policy as a lever to address cross-border drug trafficking, particularly fentanyl, and illegal immigration. The EOs have already had an immediate impact with Mexico and Canada, which each received a 30-day extension after making pledges to focus on increased border security. China, meanwhile, has pledged to take the U.S. to the World Trade Organization.
While media coverage has focused on the economic impacts, a critical institutional shift lies in the orders’ implementation mechanism: The Department of Homeland Security (DHS), rather than the Office of the U.S. Trade Representative (USTR) or Department of Commerce, is tasked with executing these tariffs.
This deviation from historical precedent raises questions about the future role of USTR in trade enforcement and the possibility that a broader recalibration of U.S. trade institutions is underway within the Trump administration.
USTR’s Traditional Role vs. the New DHS-Centric Model
U.S. President Donald Trump signs documents as he issues executive orders in the Oval Office, January 20, 2025 / Carlos Barria / Reuters
Congress established USTR under the Trade Expansion Act of 1962 as the principal negotiator and enforcer of U.S. trade agreements, with explicit authority to coordinate interagency. Its mandate includes overseeing Section 301 investigations (targeting unfair foreign trade practices) and negotiating market access terms. The Department of Commerce historically manages trade remedies such as countervailing duties (CVD) and anti-dumping (AD) cases, as well as Section 232 national security tariffs.
The decision to assign DHS—an agency focused on border security—to implement tariffs represents a strategic pivot.
Trump’s orders frame the tariffs as a national security tool tied to drugs and immigration rather than a traditional tool addressing trade imbalances. While this aligns with the Administration’s broader narrative linking economic policy to border enforcement, it nonetheless sidelines USTR’s technical expertise in tariff design and trade agreement and WTO compliance. Notably, DHS lacks institutional experience in managing complex tariff exclusions or negotiating trade-offs with affected industries—a core USTR function during prior Section 301 and 232 actions and trade agreement disputes.
Leadership Vacancies Compound Institutional Uncertainty
Office of the United States Trade Representative (USTR)
The absence of confirmed leadership at USTR and Commerce has exacerbated this shift. As of February 3, 2025, both USTR and U.S. Department of Commerce heads await Senate confirmation. The agencies are thus operating under acting officials, limiting their capacity to challenge DHS’s primacy in tariff enforcement. Historically, USTR has played a central role in balancing protectionist measures with diplomatic outreach to mitigate retaliatory tariffs. For example, during the 2018–2020 Section 232 steel tariffs, USTR negotiated quota agreements with the EU and Japan to exempt strategic allies. The current leadership vacuum leaves a void in such nuanced negotiations, increasing the risk of unchecked escalation with Canada and Mexico—the U.S.’s top two trading partners.
Exclusion of De Minimis Exceptions: A Double-Edged Sword
A critical but underreported aspect of Trump’s orders is the suspension of the de minimis exemption for sub-$800 shipments. This provision, expanded in 2015, allowed low-value parcels—often from Chinese e-commerce platforms like Shein and Temu—to enter the U.S. duty-free and with minimal screening. By revoking the exemption for tariff-targeted countries, the EO risks collateral damage:
U.S. Small Businesses: Retailers relying on affordable Chinese manufacturing for electronics and textiles will face higher costs.
Enforcement Challenges: In 2023, Customs and Border Protection (CBP) processed over 1 billion de minimis shipments; manually inspecting even a fraction could easily overwhelm ports.
Broader Implications for U.S. Trade Institutions
The sidelining of USTR appears to reflect a deliberate strategy to reframe trade enforcement as a subset of border security rather than economic policy. This has two ramifications:
Erosion of Diplomatic Leverage: USTR’s absence from tariff implementation reduces opportunities to link trade actions to broader negotiations, such as modernization of the USMCA (set for joint review in 2026).
Legal Vulnerabilities: By invoking the IEEPA the administration opens the door to legal challenges over proportionality.
The EO’s narrow focus on interdiction overlooks structural drivers of fentanyl trafficking, such as demand for illicit opioids and cryptocurrency-enabled money laundering.
Without complementary public health and financial monitoring measures, the tariffs risk becoming a blunt instrument with diminishing returns.
President Trump’s recently issued executive orders regarding Canada, Mexico, and China represent a watershed in U.S. trade policy, prioritizing border security objectives over traditional economic and diplomatic considerations. While the DHS-led model may yield short-term gains in disrupting fentanyl supply chains and illegal immigration, it undermines the institutional framework that has maintained global trade leadership since World War II while balancing protectionism.
Published by Basilinna Institute. All rights reserved.
