Study Tour

“America First” in practice: observations made by our international delegation on trade and economics

Background and political situation

Donald J. Trump's election in 2024 was largely based on economic dissatisfaction and social tensions in the US. Before he took office, the economy was burdened by weak growth, high inflation, and the aftermath of the coronavirus crisis. At the same time, migration and job losses in traditional industries played a central role in the voting behaviour of many Americans.

This mandate enabled Trump's political approach: a combination of national security rhetoric, protectionist trade policy, and targeted promotion of domestic industries. Known as the “America First” strategy. 

Trade policy in two phases: tariffs and bilateral agreements

The implementation of his trade policy can be divided into two phases:

Phase 1: Tariffs were unilaterally imposed on steel, aluminum, and later on selected high-tech products from China. Instruments such as Section 232 of the Trade Expansion Act of 1962 and Section 301 of the Trade Act of 1974 enabled rapid protectionist measures with the aim of reducing trade deficits, protecting domestic industry, and putting pressure on negotiating partners

Phase 2: Building on this tariff phase, bilateral trade agreements followed, designed to force targeted concessions from partners. The aim was to reorganize supply chains and strategically secure critical sectors such as semiconductors, AI hardware, and e-mobility.

Countries such as India committed to purchasing US grain under agreements, while other partners mainly imported soybeans. Cambodia completely abolished tariffs on US goods, Malaysia implemented a gradual reduction, and numerous agreements contain provisions on future restrictions on Chinese products. Many of these agreements also include purchases of US goods such as LNG, aircraft, semiconductors, and telecommunications equipment, thereby tying partner countries more closely to investments in the US. 

A striking example is the agreement between the US and the European Union (EU) of August 21, 2025: The EU declares the abolition of tariffs on American industrial and agricultural goods, while the US has agreed to apply a combined tariff rate of no more than 15% for certain industrial products.

This two-pronged strategy reflected Trump's electoral mandate: economic stabilization, job protection, and technological independence, coupled with the narrative that the US must restore its global competitiveness and sovereignty.

Talks in Washington: Trade, technology, and supply chains

Against this backdrop, we invited a delegation of international business and trade experts from our global network to Washington, D.C., and New York City to gain insights into US trade policy, technology investments, supply chain risks, and multilateral institutions. The aim was to identify strategies for a more resilient and competitive economy and to create an international network that transcends national borders.

The discussions in Washington highlighted the complexity of US trade policy. According to current estimates, the average effective customs duty or import tariff rate in the US will be roughly 15% in 2025, with a risk of rising to 18-20% or higher if the announced “reciprocal tariffs” are fully implemented.

The meetings in the capital show that the direct impact on consumer prices is moderate, while companies bear the bulk of the tariff costs. Small and medium-sized enterprises in particular face significant adjustment costs due to supply chain and production shifts. At the same time, it is becoming clear that US trade policy is moving away from a strictly free trade-oriented approach toward selective protectionism. Trade deficits are increasingly interpreted as a national security issue, leading to tensions between economic efficiency and strategic interests. Strategic decoupling primarily affects critical sectors such as semiconductors, e-mobility, and AI hardware. A complete separation from China would be economically problematic, so the US is pursuing targeted, differentiated trade strategies.

A key topic of the delegation trip was the resilience of global supply chains. The pandemic, geopolitical conflicts such as the war in Ukraine, and energy price risks have exposed the vulnerability of supply chains. US policy is therefore focusing on diversifying suppliers and expanding infrastructure to facilitate the reshoring of production and reduce dependencies. However, small and medium-sized enterprises face considerable challenges, as infrastructure gaps and logistical bottlenecks limit their adaptability. Technological investments, particularly in the field of artificial intelligence, play a key role in long-term competitiveness. The delegation observed that US companies are investing significantly more in AI and data-driven production than European companies. In the short term, jobs may be lost to automation, but in the medium term, new specialisations and efficiency gains will emerge. AI is thus becoming a key driver of growth, innovation, and global market share. Energy infrastructure is proving to be an important location factor in this context: the US benefits from comparatively low energy prices, which are particularly important for energy-intensive data centers and high-tech production. At the same time, the trip shows that a sustainable energy policy is necessary in the long term to ensure competitiveness and climate targets.

The delegation repeatedly asked the key question of whether the US's protectionist trade strategy would continue after Trump's term in office. Although experts were unable to provide a definitive answer, they emphasized the lasting change in US thinking, in which culturalization plays a decisive role. This shift is manifested in the White House's rhetoric, which portrays trade deficits as unfair to the US. Despite the material benefits of global trade, Americans now tend to favor an “America First” mentality and support tariffs. However, this protectionism often comes at the expense of US consumers, as tariffs are ultimately borne by them. One example of this is North Carolina, a center of the furniture industry: entrepreneurs and customers see China as the primary cause of business problems, rather than their own government's trade policy. The US has imposed tariffs on imports such as sawn timber, softwood, upholstered furniture, and finished kitchen cabinets under Section 232, based on the rationale that a weakening of domestic production capacity and increased dependence on foreign suppliers pose a threat to national security. It is therefore to be feared that this culturalization and mindset will continue even after Trump's term in office has ended. Even if the government's trade policy has negative consequences for the domestic economy, the White House can assure the population that the responsibility for this lies with external actors.

Talks in New York: Global investments and strategic perspectives

In New York, the focus was on international investment flows, global trade dynamics, and institutional frameworks. The global economy is showing initial signs of recovery, with estimated growth of around 2.8%. Trade between countries in the Global South is growing particularly strongly, while geopolitical uncertainties and fragmented supply chains pose risks. Subsidies under the Biden administration, such as the Inflation Reduction Act, played a significant role as market interventions, while tariffs themselves had only a limited effect on consumer prices. Supply chain risks remain high, especially in sectors such as semiconductors and automobiles, as raw material and intermediate product bottlenecks in China are affecting production and prices globally. Multilateral organizations such as the World Trade Organization have lost credibility, prompting countries to increasingly use bilateral mechanisms and strategic diversification to reduce uncertainty and create more stable trading conditions. Market diversification and risk management are proving to be key success factors: companies are relying on regional partnerships and different procurement strategies to counter geopolitical challenges. So-called South-South trade is also growing at present, serving as a collective countermeasure against potential economic constraints imposed by a protectionist US or an increasingly fragmented world.

In New York, Trump's trade policy and the fragility of global supply chains were once again highlighted as a wake-up call for the world, and Europe in particular. The introduction of comprehensive punitive tariffs against China has forced the global economy to recognize its deep dependence on the People's Republic and to rethink these critical dependencies – a development that could ultimately prove beneficial.

Conclusion and recommendations for policy measures

The delegation trip made it clear that, despite protectionist measures and geopolitical tensions, the US has a strong and resilient economy. Tariffs, targeted investments in technology, and the diversification of supply chains create an environment in which companies can respond flexibly to new challenges. Economic stability, strategic independence, and technological competitiveness are closely linked, and internationally networked cooperation remains crucial for long-term success.

In conclusion, it can be said that a sustainable trade policy should focus on openness, innovation, and resilience. Diversifying trade relations and supply chains strengthens economic stability and reduces dependencies, while investments in artificial intelligence and data-driven production open up significant growth opportunities. At the same time, small and medium-sized enterprises need targeted support to be able to respond flexibly to market changes and benefit from international cooperation. Only by combining these measures can long-term competitiveness, technological sovereignty, and economic freedom be secured in the spirit of a liberal, market-oriented approach.

Sources

The White House. (2025a) Report to the President on the America First Trade Policy: Executive Summary. 3 April. Available at: https://www.whitehouse.gov/fact-sheets/2025/04/report-to-the-president-… (Accessed: 11 Nov. 2025).

The White House. (2025b) Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent Annual United States Goods Trade Deficits. 2 April. Available at: https://www.whitehouse.gov/presidential-actions/2025/04/regulating-impo… (Accessed: 11 Nov. 2025).

The White House. (2025c) Adjusting Imports of Timber, Lumber, and Their Derivative Products into the United States. 29 September. Available at: https://www.whitehouse.gov/presidential-actions/2025/09/adjusting-impor… (Accessed: 13 Nov. 2025).

U.S. Customs and Border Protection. (2025) U.S. Comprehensive Free Trade Agreements and Other Trade Agreements. 4 Sept. Available at: https://www.cbp.gov/trade/priority-issues/trade-agreements/free-trade-a… (Accessed: 11 Nov. 2025).

U.S. Department of Commerce. (2025) Joint Statement on a United States–European Union Framework on an Agreement on Reciprocal, Fair, and Balanced Trade. 21 Aug. Available at: https://www.commerce.gov/news/press-releases/2025/08/joint-statement-un… (Accessed: 11 Nov. 2025).

Capital Economics. (2025) Global Economics Tariff Chart Pack (Jul. 2025). 16 July. Available at: https://www.capitaleconomics.com/publications/global-economics-chart-pa… (Accessed: 11 Nov. 2025).

J.P. Morgan Asset Management. (2025) Eye on the Market — Tariffs & Imports. June 2025. Available at: https://am.jpmorgan.com/content/dam/jpm-am-aem/global/en/insights/eye-o… (Accessed: 11 Nov. 2025).