AI at the Helm: Navigating the Shifts in U.S. Trade Policy
U.S. trade policy has become a storm of unpredictability, leaving customs brokers scrambling to stay on top of ever-changing tariffs and rules. This has put global supply chain operators on their heels, trying to react, remain compliant, and keep freight moving.
Historically, the Customs and Border Protection (CBP) agency offered long lead times and clear guidance when implementing new regulations, allowing stakeholders to prepare and adapt. But recently, that pattern has shifted drastically. Instead of months or even weeks of preparation, new rules and changes are getting announced, often with just days of notice, and in some cases, rescinded after brief implementation periods. The result is chaos.
The impacts are immediate and far-reaching. The constant barrage of updates — such as tariff changes, new de minimis rules, and complex HTS (Harmonized Tariff Schedule) associations — has pushed customs workloads to the breaking point…
…The Unlimited Pool of AI “Workers”
Amid this chaos, AI is emerging as a crucial tool to streamline operations and mitigate the impacts of regulatory changes. While AI can’t replace a broker’s expertise, it can handle redundant data entry, lookup and processing tasks, which allows human operators to focus on strategic decision-making.
Today’s regulatory environment demands that brokers remain adaptable and up to date. AI technology that integrates directly with transportation management systems or Excel outputs can keep teams informed and ready to act without having to overhaul existing workflows.
AI can quickly identify and apply the most up-to-date HTS codes, and do it within the context of existing workflows, significantly reducing the time spent on manual lookups. Through automated lookup capabilities, AI ensures that the correct tariff information is used, helping brokers avoid costly mistakes and delays.
One of the most time-consuming aspects of the job is data entry. With the shift to more complex HTS code associations and the volume increases, brokers are spending far more time entering data into their systems. AI can help reduce this manual burden by streamlining classification and entry processes, allowing brokers to process more shipments in less time.
By automating routine tasks and ensuring that teams remain agile and adaptable, AI-enabled technology provides much-needed relief for brokers navigating these regulatory shifts, which is why it is one of the more mature business use cases in global logistics today.
02/27/2025 | Greg Kefer | SupplyChainBrain
That’s What (Economic) Friends are For: Guiding Principles to Boost Supply Chain Security
The United States has recently pursued “friendshoring” of supply chains to trusted countries in the Indo-Pacific as part of its efforts to reduce dependence on China and make supply chains more resilient to global shocks. Friendshoring initiatives include plurilateral forums such as the Minerals Security Partnership and the Chip 4 Alliance, as well as initiatives to bolster bilateral economic relationships with Indonesia, Vietnam, and India, among other countries.
However, the implementation of U.S. friendshoring policy has met its fair share of challenges, including how potential tariff increases may impact its viability. Moreover, it is not always clear who is a “friend” of the United States, and there is uncertainty about the longevity and durability of the “friendship” classification. In addition, the increase in U.S. policies (and dollars) supporting domestic production – for example, through the 2022 Inflation Reduction Act – seems to be somewhat at odds with the goal of friendshoring to strengthen trusted supply chains. Furthermore, friendshoring policy reinforces trends toward the bifurcation of the global economy along a U.S./China split, contributing to a slowdown in global economic growth.
In interviews with Indo-Pacific experts both inside and outside government, the Asia Society Policy Institute (ASPI) heard that while U.S. engagement in the region is welcome, there are also some frustrations with the friendshoring policy. Interviewees bemoaned the lack of real economic benefits for their countries from initiatives to date and highlighted their disappointment with U.S. policies that subsidize domestic production, especially when they cannot compete with such incentives. The recent political positioning around Nippon Steel’s attempted acquisition of U.S. Steel was cited as undermining trust among friends of the United States. Respondents also emphasized the difficulty of excluding China from their supply chains, with several stressing the importance of balancing ties with China and the United States.
As the new administration considers the future of this policy, ASPI recommends bolstering friendshoring policies by adopting five guiding principles:
- Strategic focus: Working closely with the private sector, focus friendshoring first on a limited number of strategic sectors in line with U.S. priorities, such as chips, critical minerals, and pharmaceuticals, and expand to other sectors over time.
- Certainty: Take a long-term approach to building confidence among friends by situating friendshoring policy in a new, comprehensive U.S. economic security strategy. This would provide a clear direction, certainty, and consistency of application for friendshoring policy.
- Expanding membership: Look beyond traditional partners to include trusted developing economies that will provide greater access to resources and supply networks for businesses.
- Substantive benefits: Strengthen the benefits of friendshoring for both sides, including gains in market access, collaboration on research and development, and increased support for capacity building.
- Engagement: Ensure that engagement with trusted partners – and the U.S. business community – goes both ways, creating ample opportunities for early discussion and feedback on new initiatives.
Read the Full Issue Paper Here
03/03/2025 | Jane Mellsop | Asia Society Policy Institute
Trump’s Tariffs – How Should the EU React?
The ‘Fair and Reciprocal Tariff Plan’ proposed by Donald Trump sounds innocuous but is a roadmap towards an all-out global trade war. To avert one, Europe must act firmly and speedily.
On February 13th, the Trump administration presented the Fair and Reciprocal Tariff Plan (FRTP), signalling that it is ready to end the global trading system as we know it. Financial markets greeted the proposal with a shrug, lost in the flurry of Trump’s executive orders. But in terms of consequences for the global economy, it is the most significant and devastating of Trump’s proposals.
What is being proposed?
Because of its name, many have interpreted the FRTP as a mirroring exercise in which the US would match its import tariffs with those faced by US exports in the partner country. The combination of countless products across a wide swathe of trade partners would lead to a huge number of different rates. In fact, such an exercise would be unworkable, as the US would have to manage over 2.6 million different tariff rates, depending on the product and the country. Even if the administrative complexity could be overcome, such a proposal would only raise tariff rates by a very modest amount. Trump’s plan would hit developing countries such as Vietnam and India hardest, since they tend to have higher tariffs. The consequences for Europe would be limited, as the average EU tariff rate on US imports is only half a per cent higher than US tariffs on EU imports. The EU could slightly lower its tariffs to iron out the wrinkle.
The problem is that Trump’s actual proposal is both simpler and more radical. According to White House officials, “the expected result is an individual additional tariff rate for each country or trading partner, rather than attempting to set corresponding tariff rates on every product.” Moreover, instead of just mirroring tariff rates, this overall additional tariff rate would be based on a combination of five factors:
- Tariffs levied on US imports;
- Taxes deemed unfair, extraterritorial or discriminatory, including value-added tax (VAT);
- Non-tariff barriers, harmful policies like subsidies and regulatory requirements that impose costs on US businesses operating abroad;
- Exchange rate policies that interfere with market values; and
- Any other practice that interferes with market access or fair competition.
The potential scope of these measures is extraordinarily broad and represents a dramatic attempt to intervene in other countries’ internal regulation and taxation. It would de facto condition access to the US market on trading partners’ compliance with US preferences.
02/26/2025 | Aslak Berg | Centre for European Reform
How the US Courts Rewrote the Rules of International Trade
Consider the following two stories involving legal disputes between American companies and foreign governments.
In 1919, the ocean steamer The Pesaro sailed from Genoa, Italy, for New York City. Built in Germany for a German shipper and formerly named the SS Moltke, the steamer had been seized by the Italian government in 1915 after Italy entered World War I. On board for its departure to America four years later were 75 cases of artificial silk owned by a company incorporated and based in the United States called the Berizzi Brothers. When The Pesaro arrived in New York after two weeks at sea, however, the Berizzi Brothers cried foul: Only 74 cases of silk were delivered. One had been lost or damaged in transit.
Eighty-two years later, a dispute on an altogether larger scale began. In 2001, with Argentina’s economy mired in recession, the country defaulted on around $93 billion of government debt, in what was then the largest sovereign debt default in history. Though a portion of that debt was owed to foreign governments, the default primarily involved private bondholders such as institutional investors. Most of these creditors would eventually agree to restructure the debt for cents on the dollar (thus booking losses), but a minority of the debt holders refused to accept this “haircut.” Like the Berizzi Brothers eight decades earlier, these holdouts, too, were based in the United States, namely a group of Wall Street “vulture funds” that had invested in the debt at distressed prices.
Beyond the fact that both cases pitted American firms against foreign governments, what links these stories is that the firms in question sought legal redress for their grievances. Not only that, but they sought this redress specifically in American courts, and thus by appeal to US law. The Berizzi Brothers sued for $250 in damages; the vulture-fund owners of the Argentinian debt sued for full face value plus interest.
The Berizzi Brothers’ case ended up in the US Supreme Court, and in 1926 the company lost, which is to say that the Italian government won. The Pesaro was owned and operated by Italy, and it was well established under US law that foreign governments (and their oceangoing vessels) were immune from suit in domestic courts. Yes, the Italian government was engaged in this case in a commercial activity, but it was so engaged, the court ruled, in a public rather than private capacity and with a public purpose.
But the Argentine government would not prove so fortunate, twice finding itself on the receiving end of negative legal judgments in its battle with the vulture funds. The first was when the US courts decided in 2012 in favor of the creditor holdouts, ruling that the full bond value was indeed due. The second followed Argentina’s subsequent decision—highly unusual among sovereign debtors in recent decades—to stand firm and continue to not pay up. While the US courts could not directly make Argentina pay, they could and did make life extremely uncomfortable, issuing rulings from 2012 to 2014 that indirectly forced the Argentine government’s hand by prohibiting it from making payments to other creditors unless it paid the holdouts first, and by prohibiting anyone anywhere in the world except Argentina from helping the country make such payments.
This pair of legal battles prompts a number of questions: What role does the law play in the arbitration of economic disputes? How does the direct involvement of sovereign states in such disputes affect that legal function? And what difference does it make when legal and economic disputes involving governments spill across national borders? These concerns have once again moved to the fore, with an explicitly protectionist and imperially minded president having taken the reins of power in America. The transition from The Pesaro and silk to Argentinian bonds and American vulture funds is an essential backdrop against which to answer these questions. In the course of eight decades, US courts seemingly made a decisive turn against foreign governments, stacking the deck in favor of American companies and becoming, in the process, a handmaiden to American empire.
03/03/2025 | Brett Christophers | The Nation
2025 Trade Policy Agenda and 2024 Annual Report of the President of the United States on the Trade Agreements Program
On February 27, the Office of the U.S. Trade Representative published their 2025 Trade Policy Agenda, 2024 Annual Report, and World Trade Organization at Thirty report to Congress.
The agenda lays out the Administration’s vision for trade, describing the economic and national security challenges facing the United States and articulates a plan for rebalancing trade to address those challenges, including the work required by the President’s America First Trade Policy Presidential Memorandum.
The 2024 Annual Report gives a summary of the activities undertaken by the Office of the USTR during the previous year. The WTO at Thirty report assesses U.S. interests at the WTO, in particular describing the challenges facing the institution and the need for reform.
02/27/2025 | Office of the U.S. Trade Representative