Trading with the US remains possible despite turbulent times

But what is not yet, can still come. Two recent events are important in this regard. The first was on 20 March 2025, sixty days after Trump's inauguration, with the completion of a number of tax investigations. These were investigations into tax breaks for companies which could expire towards the end of the calendar year. Trump wants to continue the tax breaks for American companies. For this he needs the support of Congress, which is not a foregone conclusion, even though the Republican party has control of both the House and Senate. In Trump's eyes, tax breaks for companies are an important instrument to stimulate investment in American production, in addition to import duties that are mainly intended to make foreign products less attractive.
The second event was the major announcement of several measures, the America First Trade Policy and the reciprocal tariff plan. When this magazine went to press, it seemed likely to take place on April 2. The measures will be based on a study of the differences in European and American import duties. Currently, European exporters pay an average of 3.3 percent import duty in the US, while American exporters pay five percent when exporting to Europe. Trump will probably use this difference of 1.7 percentage points to justify new, higher trade tariffs.

Bluff poker
The fiscal investigations and the investigation into the differences in European and American import duties will probably form the basis for concrete policy measures. But does this mean that Trump will put forward a multitude of duties and trade barriers in the near future? That remains to be seen. The fact is that Trump’s actions are erratic and fickle. It is also far from certain what his reaction to the results of the investigations of March 20 and April 4 will be. The logical reasoning would be that if he dislikes the results, he will continue to obstruct exports to the US. But that is not entirely certain. Just as it is uncertain what Trump will do once the dust of his reaction to these two investigations has settled.
It is not impossible that Trump is deliberately creating this uncertainty. That it is not only a by-product of Trump's management style, but fundamental to his negotiating strategy. That he assumes that by taking extreme positions, he creates negotiating space to enable him to force even more concessions from trading partners. Trump is a bluff poker player. He believes that threatening to impose tariffs is psychologically far more effective than in fact imposing them. And that once tariffs are formally implemented, the market simply adjusts, which leaves him with less ‘leverage’ to impose pressure. In this scenario, Trump is more likely to continue threatening and creating confusion than to carry out threats. Unfortunately, this too is uncertain; no one knows Trump’s motives except himself (and even that is questionable).

The unruly reality
Another possibility is that Trump will introduce new measures to curb imports to the US. This too would not be surprising, as to Trump, trade deficits are tangible evidence that America is being economically undermined. He sees years of unbalanced trade relations as a systematic weakening of the American industrial base, causing factories to close and jobs to disappear while other countries –with China in the lead – flourished. Hence Trump’s Make America Great Again: fewer imports, more domestic production and greater control over strategic sectors to promote America’s economic sovereignty and national security.
If Trump does indeed decide to further restrict imports, the question remains what the measures will look like. And what the consequences will be. Not all products will be equally vulnerable to import tariffs. Products that are unique or significantly better than American alternatives will be less likely to be affected by trade barriers. It also depends on the customs clearance agreements. If it is contractually agreed that the importing American party will pay the import tariffs, the exporter will not suffer any direct negative consequences from higher tariffs. The American importer will bear the financial burden and then has two choices, either absorb the tariffs in its own profit margin or pass the costs on to end users.
Another complicating factor is that Trump may, in his attempts to make it more difficult for exporters to the US, be confronted with the unruly realities. Even if he does indeed want to make imports more difficult and is not playing a bluff, it does not mean he will succeed. Reality bites: Trump may now be ‘in control,’ but he will inevitably have to deal with the limitations of presidential power and the complexities of trade flows that make effective interventions difficult and can have unintended consequences. Abrupt, drastic changes could inflict enormous damage on American companies and consumers. For example, some components of ‘typically US-made cars’ cross the US border with Mexico up to seven times before they reach the market. If import duties were imposed at each of these instances, it would drive up the price of American cars. Something that Trump also does not want, as was evident when he decided to waive duties on products from Mexico and Canada after criticism from the US auto industry. Even the most determined president will eventually encounter insurmountable difficulties in reforming trade policy. Especially if the financial markets are in turmoil because the president is pursuing a fickle policy.

Still much to offer
The uncertainties are multitudinous. Will Trump introduce import restrictions in the coming period? If so, what would the measures look like? And what will they be aimed at? What will the consequences be for the various countries, companies and sectors that focus on exporting to the US? Or will Trump refrain from taking concrete measures – even if only partially? Should we see his threats as bravado, intended to impress opponents and strengthen his own negotiating position –the bullying behaviour of someone who prides himself on having fully mastered the art of the deal? And, to create complete confusion, to what extent is Trump in fact in the position to carry out his intentions to reduce America's trade deficit and protect the country from unwanted imports and interference?
These uncertainties severely complicate doing business with the US. While at the same time companies recognize that the country has much to offer. Because do not forget that the United States is one of the largest markets in the world, with a population of over 330 million people. This creates an enormous potential market for a wide range of products and services. In general, American consumers have high purchasing power, which means that there is huge demand for both basic and luxury goods. The American market is also diverse, with different regions and demographic groups which each have their own preferences and needs. And do not forget that the individual states in the US have a range of (tax) incentives for companies that set up there. It would be unfortunate indeed for companies orienting themselves towards opportunities abroad, to miss these opportunities.

Stop, look and listen
What is the best approach then? In times of great unpredictability, stop, look and listen is always a sensible starting point. Making drastic business decisions based on a brusque remark or a threat from Trump would be premature. As long as those outbursts have not yet been translated into concrete policy, there is no point at all in reacting. Staying calm and not reacting to every statement might well save time and money.
That does not mean that it is wise to regard everything Trump says as inconsequential. On the contrary. It is essential for companies that focus on the American market to closely monitor the situation in the US and to anticipate possible policy measures. Consider the studies to be completed in March and April 2025: what if import tariffs of ten, twenty-five or fifty percent are introduced? Not unthinkable, certainly not if the US also starts considering the (alleged) costs of compliance with the European GDPR and the various VAT regulations as a form of import tariffs. Companies can beforehand already consider the impact of possible import tariffs, work out various scenarios and prepare action plans. To do more business with the South American Mercosur countries, for example. Or with Asia. A positive effect could be that new trade agreements such as Mercosur can be introduced more quickly. With good preparation, companies and countries can act decisively if and when measures are indeed taken.

The useful dictum remains: do not take Trump literally, but do take him seriously.

Essay by Marc ter Haar, Executive Director at the American Chamber of Commerce in the Netherlands. Published in Management Scope 04 2025.