Insights

America’s Trade Policy: Historical Blip or the New Normal?

August 2025

Driving the conversation

The U.S. is undertaking the most significant shift in international trade in nearly a century, forcing investors to reassess core assumptions and transforming geopolitics. Washington has moved away from decades of trade liberalization, with country-specific tariff roiling markets and with sector-specific tariffs reshaping global trade dynamics for years to come. With the news coming at a dizzying pace, this explainer shows how we got here, what matters most, and what this means for the future.

  • Sectoral Tariffs Are Here to Stay The Trump administration’s country-specific tariffs make headlines, but sector-specific tariffs will have a more lasting impact. These tariffs are likely to stick around due to domestic political and economic hurdles in unwinding them, as well as growing bipartisan consensus that domestic manufacturing in key strategic sectors is necessary for U.S. national security.
  • Brace for more Restrictive Rules in New U.S. Trade Agreements Any future U.S. trade deals, even narrow sectoral agreements, will likely include stringent rules of origin to prevent third countries from exploiting agreements.
  • Increased Geopolitical Competition Rising geopolitical strains and fears of over-concentration—especially in sensitive sectors like semiconductors and critical minerals—are leading to a fragmented global trade landscape, with countries erecting more barriers and trading within blocs.
  • New Opportunities on Digital Trade Despite challenges, advances in technology, especially AI, and digital services offer opportunities for a series of digital trade agreements.

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