During his first term, Trump had invoked national security provisions to impose 25 per cent tariffs on steel and 10 per cent on aluminum from India and other countries and had revoked the Generalized System of Preferences (GSP), a preferential trade agreement which benefited India the most.

“The Secretary of the Treasury, in consultation with the Secretary of Commerce and the Secretary of Homeland Security, shall investigate the feasibility of establishing and recommend the best methods for designing, building, and implementing an External Revenue Service (ERS) to collect tariffs, duties, and other foreign trade-related revenues,” the White House stated.

Trump also directed the United States Trade Representative (USTR) to review existing US trade agreements and sectoral trade agreements and to “recommend any revisions that may be necessary” or appropriate to achieve or maintain the general level of reciprocal and mutually advantageous concessions with respect to free trade agreement partner countries.

Notably, India, the US and 12 other members including Australia, Indonesia and Japan signed an Indo-Pacific Economic Framework (IPEF), a regional agreement to increase economic integration and cooperation in the Indo-Pacific. India is a signatory of three pillars of IPEF: supply chains, clean economy, and fair economy.

Focus on trade deficit with China

The White House instructed the USTR to review the economic and trade agreement between the US and China to determine whether the latter is adhering to its commitments under the agreement.

“The USTR shall recommend appropriate actions to be taken based on the findings of this review, up to and including the imposition of tariffs or other measures as needed,” the White House statement read.

Notably, Trump has appointed China sceptic, Jamieson Greer as the US Trade Representative (USTR). Greer, a former military officer and international trade attorney, is expected to carry forward the trade policies of Trump’s first term. The announcement followed speculation that Robert Lighthizer, the architect of Trump’s tariff war, might serve a second term as USTR. However, Greer, known as Lighthizer’s protégé, is anticipated to play a similar role, having previously served as Lighthizer’s chief of staff during Trump’s first term.

China’s exports gained momentum in December, pushing year-on-year growth in 2024 up by 5.9 percent to $3.58 trillion, according to customs data released by Beijing on Monday. Imports, however, grew at a slower pace of 1.1 percent to $2.59 trillion, resulting in a trade surplus of $992.2 billion for the year.

“The Secretary of Commerce and the United States Trade Representative shall assess legislative proposals regarding Permanent Normal Trade Relations (PNTR) with the PRC and make recommendations regarding any proposed changes to such legislative proposals,” the White House said.

If the US decides to revoke China’s PNTR status, it would result in a tariff increase on all Chinese goods entering the US.

Target on China’s currency manipulation

The White House has indicated that US measures to address the trade gap with China will extend beyond tariffs.

“The Secretary of the Treasury shall recommend appropriate measures to counter currency manipulation or misalignment that prevents effective balance of payments adjustments or that provides trading partners with an unfair competitive advantage in international trade, and shall identify any countries that he believes should be designated as currency manipulators,” the White House stated.

The US on multiple occasions said that China has taken concrete steps to devalue its currency and the purpose of China’s currency devaluation is to gain an unfair competitive advantage in international trade.

According to the US Treasury, China should pursue more market-based economic reforms to bolster growth and confidence in its currency.