Trump has held off for the time being on imposing the tariffs he promised on the campaign trail. Instead, on Jan. 20, Inauguration Day, he issued a presidential memorandum that calls for several investigations and reviews, including into the large and persistent trade deficits, unfair trade practices, the feasibility of an External Revenue Service, the policy and procedures for rates of exchange, current trade agreements, current dumping duty practices, low-value de minimis imports, and the application by foreign nations of discriminatory or extraterritorial taxes. The memorandum also calls for an evaluation of China’s adherence to the Phase One agreement reached with the United States in 2020, as well as an evaluation of legislative efforts to remove the most-favored-nation designation from China.
Crowe observation
Although not part of the memorandum, Trump stated during an Oval Office signing ceremony that a 25% tariff on Mexico and Canada could go into effect on Feb. 1.
The presidential memorandum provides a preview of trade policy that could be implemented by the new administration. At this point, however, it is unclear whether or when increased tariffs will go into effect, what goods and services could be subject to new tariffs, which countries could be affected, and whether new tariffs will be imposed by administrative action, legislation, or both. Companies should consult with their tax advisers to keep abreast of the latest developments and be ready to respond to the changing trade landscape.
Explore more content
As the Biden administration transitions out of office, the IRS and Treasury are racing to finish and publish guidance that was in process.
After 11 years, the IRS and Treasury have finalized proposed regulations relating to the application of allocating partnership recourse liabilities.
As the Biden administration transitions out of office, the IRS and Treasury are racing to finish and publish guidance that was in process.
After 11 years, the IRS and Treasury have finalized proposed regulations relating to the application of allocating partnership recourse liabilities.