A Second Trump Administration Brings Volatilities to Global Business

President-elect Trump will likely reinstate “America First” policies, potentially reshaping U.S. trade and international relations, with significant implications for global companies.  

Change in approach to foreign policy: Trump’s approach to foreign policy may introduce volatility to alliances like the EU, impact Middle East peace efforts, and further sour U.S.-China relations. 

Potential tariff increases: Trump’s plan to impose a 10% or 20% tariff on all imports, if executed, could provoke widespread retaliatory tariffs isolating the U.S. from global trade. 

• Such actions may significantly decrease both U.S. imports and exports, affecting domestic industries and international partnerships. 

Labor and human rights issues in global supply chain: The incoming Trump administration is likely to deprioritize collaboration with traditional allies on international labor standards and human rights. 

• However, compliance with U.S. trade laws, such as the Uyghur Forced Labor Prevention Act, will remain critical, with a focus on enforcing existing regulations. 

• Supply chain tracing, particularly for critical minerals and battery will continue to be emphasized . 

USMCA renegotiation prospects: The current USMCA passed during the first Trump administration with overwhelming bipartisan support. The agreement is due for review in 2026, with potential reforms to the Rapid Response Mechanism, a dispute settlement mechanism providing for expedited enforcement of workers’ free association and collective bargaining rights at the facility level.

The bottom line: Employers with operations or supply chains outside of the US are advised to proactively monitor the evolving policies as the incoming Trump administration’s approach take shape. Global employers should be prepared for growing divergences between the United States and the European Union in the regulation of labor, human rights, artificial intelligence, and technology.