U.S. and Chinese Negotiators Hold Trade Discussions in Malaysia: This weekend, Treasury Secretary Scott Bessent and U.S. Trade Representative (USTR) Jamieson Greer will meet with Chinese Vice Premier He Lifeng in Malaysia to continue trade discussions. On October 22, Secretary Bessent told Fox Business that the discussions will focus on China’s announcement about export controls on rare earths and related technologies, which heightened tensions between the two nations in recent weeks. Secretary Bessent said he hopes the issue will be “ironed out this weekend so that the leaders can enter their talks on a more positive note.” However, the secretary made clear that “all options are on the table” if a consensus is not reached, including reports that the United States is considering imposing retaliatory export controls on critical software, such as laptops and jet engines.

The progress made in these negotiations will set the stage for President Donald Trump’s and Chinese President Xi Jinping’s in-person meeting on October 30 at the Asia-Pacific Economic Cooperation (APEC) Summit. Although the meeting has yet to be confirmed by the Chinese government, President Trump has maintained that he will have a “pretty long meeting” with President Xi, where they will “make a deal on, I think everything.” However, U.S.-China relations remain fragile, and a comprehensive trade deal between the two nations is unlikely to be reached in the short term.

USTR Initiates a Section 301 Investigation of China’s Implementation of the ‘Phase One’ Agreement: On October 24, United States Trade Representative (USTR) Jamieson Greer announced the initiation of a Section 301 investigation of China’s implementation of the Economic and Trade Agreement Between the Government of the United States of America and the Government of the People’s Republic of China (“Phase One Agreement”). According to the notice, “USTR will examine whether China has fully implemented its commitments under the Phase One Agreement, the burden or restriction on U.S. commerce resulting from any non-implementation by China of its commitments, and what action, if any, should be taken in response.” This new investigation appears intended to strengthen U.S. negotiators’ hand and could provide a legal basis for new tariffs.

Tariffs up to 25% remain in place on a range of Chinese imports under the Section 301 investigation from the first Trump administration, although significant exclusions apply. If the Supreme Court ultimately rules against the Trump administration’s use of the International Emergency Economic Powers Act (IEEPA) to impose an additional 30% tariff on Chinese imports, this investigation could form a separate basis to reimpose tariffs at similar levels.

The Section 301 investigation provides an opportunity for public comments, which are due December 1, 2025. A public hearing is also scheduled for December 16, 2025, and requests to testify are due December 1.

President Trump Halts Trade Negotiations with Canada: On October 23, President Trump announced the termination of trade negotiations with Canada, criticizing a recent advertisement launched by Ontario Premier Doug Ford. In contrast to Prime Minister Mark Carney, Ford is an outspoken critic of U.S. tariff policies and has called on the prime minister to impose retaliatory measures. This week, Ontario launched an ad campaign featuring former President Ronald Reagan describing tariffs as harmful to American consumers and the broader U.S. economy. In response, President Trump stated, “TARIFFS ARE VERY IMPORTANT TO THE NATIONAL SECURITY, AND ECONOMY, OF THE U.S.A. Based on their egregious behavior, ALL TRADE NEGOTIATIONS WITH CANADA ARE HEREBY TERMINATED.” The president added that the voice-over of President Reagan is “FAKE” in reference to a statement released by the Ronald Reagan Presidential Foundation and Institute that warned the ad uses “selective audio and video of President Ronald Reagan delivering his ‘Radio Address to the Nation on Free and Fair Trade.’”

President Trump further alleged that “Canada is trying to illegally influence the United States Supreme Court” in its consideration of two separate challenges to tariffs under the International Emergency Economic Powers Act (IEEPA). The Supreme Court is set to hear oral arguments in the two consolidated cases, Trump v. V.O.S. Selections and Learning Resources v. Trump, on November 5, 2025.

The president’s termination of trade negotiations with Canada represents a significant setback in recent diplomatic progress. On October 7, President Trump met with Prime Minister Carney to discuss the future of the U.S.-Mexico-Canada Agreement (USMCA) and emphasized their relationship has “come a long way over the last few months,” describing Carney as a “world-class leader.” The leaders will both be in attendance at the APEC Summit next week, but prospects for reviving trade discussions remain uncertain.

Democratic Senators Send Letter on Section 232: On October 23, Senate Finance Committee Ranking Member Ron Wyden (D-OR), along with nine other Democratic senators, sent a letter to Commerce Secretary Howard Lutnick raising concerns about the Trump administration’s use of Section 232 of the Trade Expansion Act of 1962. The senators argue that, while select imports may pose a threat to national security, the Trump administration’s “reliance on Section 232 to pursue tariffs on everything from cars to household appliances and kitchen cabinets stretches the limited authority delegated by Congress.” As a result, the product-specific tariffs are counterproductive, undermining U.S. economic stability, global competitiveness, and security interests. The senators call on the Department of Commerce to publish its findings in Section 232 probes and provide stakeholders with sufficient time to submit public comments to ensure the administration remains accountable to U.S. citizens.
 
USTR Proposes Trade Restrictions on Nicaragua: On October 20, the Office of the U.S. Trade Representative (USTR) issued its determination in the Section 301 investigation of Nicaragua. The investigation, which was initiated in December 2024, examined whether Nicaragua’s actions related to labor rights, human rights, and the rule of law constitute unfair or discriminatory practices that “burden or restrict U.S. commerce.” USTR concluded that the Government of Nicaragua has created a “high-risk environment for U.S. companies investing and conducting business in the country” through labor exploitation, property seizures and human rights abuses. To address these findings, USTR proposed imposing a 100% tariff on Nicaraguan imports and suspending Nicaragua’s benefits under the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR). Public comments on the proposed actions are due by November 19, 2025.

Trump Threatens Tariffs on Colombia: On October 19, President Trump confirmed a social media statement by Sen. Lindsey Graham (R-SC), suggesting the president would be imposing tariffs on Colombia the following day. While speaking to reporters aboard Air Force One, President Trump said, “I read the statement of Sen. Graham, and it is correct.” He later referred to Colombian President Gustavo Petro as an “illegal drug leader” and accused him of encouraging “massive” drug production throughout Colombia. President Trump said that, effective immediately, the United States would halt all payments and subsidies to the country and indicated that continued inaction by Colombia could prompt additional U.S. enforcement measures.

Although the tariffs have yet to be announced, President Trump’s statements have escalated tensions between the two nations, whose relations have been fragile in light of U.S. strikes on several vessels suspected of drug smuggling in the Caribbean Sea. President Petro described President Trump’s accusations as “rude and ignorant” and maintained that his government remains committed to combating drug trafficking.

President Trump Imposes Tariffs on Heavy-Duty Vehicles: On October 17, President Trump issued a proclamation to impose a 25% tariff on imports of medium- and heavy-duty vehicles (MHDVs) and medium- and heavy-duty vehicle parts (MHDVPs), as well as a 10% tariff on buses, under Section 232 of the Trade Expansion Act of 1962. The president first announced the new duties in a September 25 social media post, indicating they would take effect on October 1. He later postponed the implementation date to November 1, as reflected in the proclamation.
 
There are key exemptions to the new duties on MHDVs and MHDVPs. MHDVs that qualify for preferential treatment under the U.S.-Mexico-Canada Agreement (USMCA) will only be subject to the 25% tariff on the value of their non-U.S. content, rather than the full value of the vehicle. USMCA-compliant MHDVPs will not be subject to the 25% tariff until the secretary of commerce, in consultation with U.S. Customs and Border Protection (CBP), establishes a process to exclusively apply the duty to the non-U.S. content of each part.
 
Additionally, the proclamation provides strategic relief to manufacturers that complete final assembly in the United States. MHDV manufacturers will be eligible to receive an import adjustment offset equal to 3.75% of the aggregate value of all trucks assembled in the United States from Nov. 1, 2025, through Oct. 31, 2030. The offset will reflect the total duty that would be owed when a 25% duty is applied to parts accounting for 15% of an MHDV’s value. The secretary of commerce is directed to establish a similar process to support MHDV engine manufacturers.
 
The proclamation also adjusts the import adjustment offset for domestic automobile manufacturers to maintain parity across the light- and heavy-duty vehicle sectors. As a result, automobile manufacturers will be able to offset 3.75% of the Manufacturer’s Suggested Retail Price (MSRP) of automobiles assembled in the United States through 2030.