Trade Deficits, Tariffs, and the 2026 U.S. Trade Policy Agenda

ARTICLE | April 13, 2026

Authored by Aprio

Summary: The 2026 Trade Policy Agenda outlines a significant shift in how the U.S. will approach international trade. From bilateral agreements to a redefined relationship with China, the agenda’s six core priorities will impact manufacturers, importers, exporters, and investors. In this article, we breakdown what’s in it and what businesses should be watching.

What is Driving the 2026 U.S. Trade Policy Agenda?

Over the past several decades, the U.S. has faced increasingly large trade deficits and a sharp decline in domestic manufacturing.

The government is hoping to address these concerns with the 2026 Trade Policy Agenda—a proposal aimed at strengthening the nation’s economic framework. A central point of tension in the trade agenda focuses on the how the global trading system is operated, specifically on the disparity in tariff rates:

• United States: 4% average most-favored-nation (MFN) tariff rate
• European Union: 5%
• China: 10%
• Vietnam:7%
• Brazil:4%
• India:8%

But tariffs are just one piece of this puzzle. The 2026 Trade Policy Agenda also targets foreign wage suppression, government subsidies, unfair regulatory hurdles, and currency manipulation, which can influence the competitiveness of American goods in international markets.

Six Priorities of the America First Trade Policy

In response to these challenges, the agenda outlines six key priorities aimed to boost domestic competitiveness, protect critical industries, and ensure fair market access for American businesses. Understanding each priority will help companies navigate new trade agreements, enforcement actions, and evolving regulations that impact trade, supply chains, and international operations.

#1 The Agreement on Reciprocal Trade (ART) Program

What does it mean? The ART program establishes bilateral trade deals where partners lower tariffs for U.S. goods, while the U.S. keeps supplemental tariffs on imports. Recent agreements have opened markets for U.S. products and expanded access in countries like Indonesia, the EU, UK, Australia, and Israel. Current ART commitments include:

• Indonesia agreed to eliminate tariffs on 99% of U.S. products.
• EU committed to eliminating tariffs on 100% of U.S. industrial goods, with preferential access for U.S. agriculture, dairy, and seafood.
• UK opened its market to $700 million in U.S. ethanol and $250 million in additional agricultural goods, including beef.
• Australia ended its 22-year restriction on U.S. beef imports.
• Israel agreed to permanent, comprehensive agricultural market access.
• 13 countries agreed to accept vehicles built to U.S. safety and emissions standards.

What is the impact? Businesses that export goods or services may see a change in their access to markets where ARTs are in place. Review affected markets and product categories to understand new opportunities, rate changes, and shifting tariffs.

#2 Robust Trade Enforcement

What does it mean? The United States Trade Representative (USTR) is committing to ongoing use of Section 301 investigations to address foreign trade practices identified as discriminatory or trade-distorting. The following areas are currently under review:

• China’s semiconductor and shipbuilding practices
• Nicaragua’s labor practices
• Foreign digital services taxes applied to U.S. technology companies
• Global industrial overcapacity and seafood trade practices
• Pharmaceutical pricing policies

What is the impact? Additional tariffs and enforcement actions are likely, so companies importing goods in sectors currently under Section 301 review should closely monitor policy shifts that may impact their costs and operations.

#3 Critical Supply Chain Security

What does it mean? The policy prioritizes several industries for domestic production expansion and import source diversification for both economic and national security considerations. New agreements, such as the Agreement on Trade in Critical Minerals (ATCM), aim to reduce reliance on concentrated supply sources. Specified industries include:

• Pharmaceuticals and medical equipment
• Semiconductors and semiconductor manufacturing equipment
• Steel, aluminum, and downstream metals
• Critical minerals and rare earth processing
• Automotive parts and finished vehicles
• Energy inputs and technologies

What is the impact? Companies that produce, process, or depend on goods in these sectors may see shifts in both costs and sourcing options as policy develops. Monitoring policy developments in each sector and assessing sourcing strategies will be critical for affected companies.

#4 USMCA Joint Review

What does it mean? The U.S.–Mexico–Canada Agreement (USMCA) is undergoing review, with issues like trade deficits and sector-specific barriers under scrutiny. The U.S. has outlined several areas it intends to address through this process:

• The goods trade deficit with Mexico grew from $111 billion in 2020 to $197 billion in 2025
• The goods trade deficit with Canada grew from $14 billion in 2020 to $46 billion in 2025
• Mexico’s energy sector policies, which the U.S. argues hinders American investors
• Canada’s adherence to USMCA dairy market access commitments
• Canada’s Online Streaming Act, which the U.S. views as creating barriers for American digital content

What is the impact? Businesses with suppliers, customers, or operations in Mexico or Canada should track the review process closely. Potential changes to rules of origin, tariff treatment, or investment provisions could affect how cross-border supply chains are structured and priced.

#5 Managing Trade with China

What does it mean? U.S. policy with China emphasizes managed trade and reciprocity, resulting in a reduced trade deficit and a new framework agreement. Key figures cited in the agenda include:

• The U.S.–China goods trade deficit declined 32% year-over-year in 2025
• China is no longer the country with which the U.S. runs its largest goods trade deficit for the first time since 2000
• A bilateral framework agreement was reached in 2025

What is the impact? Companies with supply chains, sourcing arrangements, or sales tied to China should expect ongoing policy changes. To stay prepared, track evolving policy changes, such as tariff levels, import rules, and compliance requirements.

#6 International Engagement

What does it mean? The U.S. is advocating for changes in how global trade institutions operate, specifically shifting towards a framework that reflects reciprocal relationships between individual trading partners.

• Continued participation in G7, G20, OECD, and WTO
• Focus on industrial overcapacity, forced labor, and digital trade
• Pursue a permanent moratorium on electronic transmission duties
• Advocacy for flexible market access commitments
• Emphasis on reciprocity in trade frameworks

What is the impact? Businesses in digital trade and eCommerce should watch for updates that could affect international market access and tariff treatment. More broadly, businesses with long-term international market access strategies should be aware that the trade framework may look different in the years ahead.

What Does the First Year of Data Show?

The trade agenda opens with an economic overview from the first year of implementation, painting a picture of how key sectors and indicators have evolved and broader shifts in the economy. Key metrics citied include:

• The monthly U.S. goods trade deficit declined year-over-year every month through December 2025.
• Total U.S. goods and services exports reached a record $3.4 trillion, marking a 6.2% increase.
• Capital goods exports, covering sectors like semiconductors, aircraft, and telecom equipment, rose 9.9%.
• A manufacturing activity survey in January 2026 indicated factory expansion for the first time in over two years.
• The U.S. surpassed Japan in crude steel production for the first time since 1999.
• Average private-sector earnings rose an estimated $2,700 over the past year.
• Real disposable income grew by 1.6% in 2025, supporting consumer spending.

It’s worth noting that attributing these shifts solely to trade policy is complex — macroeconomic data reflects many variables, and economists will continue to debate the degree to which tariffs versus other factors drove these outcomes. Businesses should closely monitor how these trends develop throughout 2026 before drawing firm conclusions.

Final Thoughts: Adapting to the Shift in Global Trade

No matter how the policy debate unfolds, the 2026 Trade Policy Agenda will create significant changes to the global trade landscape. Businesses will need to proactively adapt as the policy shifts outlined could affect import costs, export opportunities, supply chain structures, and cross-border investment decisions across many industries. Staying informed and working with a qualified advisor is the most practical way to navigate what is shaping up to be a dynamic shift to the global trade environment.

Please connect with your advisor if you have any questions about this article.

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This article was written by Aprio and originally appeared on 2026-04-13. Reprinted with permission from Aprio LLP.
© 2026 Aprio LLP. All rights reserved. https://www.aprio.com/insights-events/trade-deficits-tariffs-and-the-2026-us-trade-policy-agenda-ins-article-tax/

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