As former United States Trade Representative, Katherine Tai brings unparalleled insight into the complexities of global trade and economic policy. Known for her clear, analytical approach and deep understanding of international negotiations, Tai has emerged as a trusted voice for interpreting the fast-moving and often unpredictable shifts in U.S. trade strategy.  

In a recent conversation, she shared her thoughts on the evolving landscape of tariffs, how it's affecting global relationships, and what it means for American consumers, businesses, and the economy at large. 

At a glance:

• What’s Been Happening with Tariffs So Far?
• What’s on the Horizon: Key Trade Milestones to Watch
• Is There a Strategy Behind the Uncertainty?
• How Is This Impacting Our Global Relationships—Especially with China?
• Who’s Most Affected, and What Should We Expect?
• Should People Be Panic Buying? 
• Are We Headed for a Recession? 
• A Silver Lining: Americans Are Paying Attention 

Katherine Tai On Tarrifs

What’s Been Happening with Tariffs So Far? 

According to Tai, the second Trump administration has moved quickly in implementing a series of trade policy actions, with a particular focus on tariffs. In the first two and a half months, several significant measures have been introduced, including: 

• Initial tariffs on China (10%), Canada and Mexico (25%), followed by China increases to 20%, and later a spike to 125%. 
• Sector-specific tariffs such as a 25% duty on autos (with USMCA partners exempt), and on steel and aluminum. 
• A sweeping 10% tariff on all imports and country-specific tariffs on 60 nations announced on April 2nd—some of which were later paused. 

Tai noted that a key characteristic of the current approach is its unpredictability, a key reason why our economic future is difficult to forecast.  

What’s on the Horizon: Key Trade Milestones to Watch 

Tai emphasized that the next several months will be pivotal in shaping the direction of U.S. trade policy. Several upcoming dates may serve as inflection points for major decisions: 

• April 2025: The administration is expected to announce findings from an investigation into commercial shipbuilding, focused on China. Tai noted this could lead to significant new tariff actions that may catch markets off guard. 
• By December 2025: A decision is due on potential tariffs related to legacy semiconductor chips, stemming from an investigation initiated under the previous administration. The outcome could affect multiple sectors, including tech and manufacturing. 
• By July 1, 2026: The United States, Canada, and Mexico are required to review and reaffirm (or revise) their commitments under the USMCA. Early tariff actions against Canada and Mexico, including on autos and lumber, may be laying the groundwork for complex renegotiations. 

These dates may reshape trade dynamics, trigger new rounds of negotiations, and impact pricing and supply chains across industries. Tai encouraged businesses and policymakers to track these developments closely and anticipate further shifts as the administration clarifies its approach. 

Is There a Strategy Behind the Uncertainty? 

Tai explained that the current administration is working toward a broader economic transformation. The aim is to shift from a consumer-driven economy to one centered around manufacturing and exports. This includes reducing the trade deficit, weakening the dollar to make U.S. goods more competitive, and using tariffs as leverage to spark new negotiations. 

In this context, tariffs are not just economic tools—they’re political signals meant to drive both domestic change and international action.  

Tai noted that the evolving and often reactive nature of recent policy decisions has made it challenging for industries and stakeholders to anticipate changes and plan strategically. 

How Is This Impacting Our Global Relationships—Especially with China? 

One of the key relationships in the current trade landscape is with China. While the U.S.–China dynamic played a prominent role in the first Trump administration and during the 2024 campaign, Tai observed that, so far, a clear engagement strategy with Beijing has not been evident. Communication between the two governments appears limited, with current actions largely focused on increasing economic pressure. 

At the same time, the administration has initiated outreach to other trading partners—including the UK, Japan, India, and at times Australia and Indonesia—with ongoing discussions that could result in a range of agreements, from sector-specific arrangements to broader trade frameworks. 

Who’s Most Affected, and What Should We Expect? 

Whether you’re a multinational corporation or a small business, Tai said, the lack of predictability is a major barrier to planning. “It’s like trying to play in an orchestra with no conductor,” she said. Every sector, from agriculture and manufacturing to tech and retail, is touched by these policies. 

Consumers, too, are impacted. Tai pointed to a fundamental shift the administration is pushing for: reducing America’s role as the world’s consumer market and expanding its role as a producer. This transition may bring adverse short-term economic consequences in pursuit of long-term structural change. 

Should People Be Panic Buying? 

Given the uncertainty, some consumers and businesses may feel tempted to stockpile. Tai acknowledged that instinct, but cautioned against it. Panic buying and hoarding, she warned, could amplify the very challenges we’re trying to avoid—like inflation and supply chain disruptions. “It’s a vicious cycle,” she said, referencing how similar behavior during COVID worsened global shortages. 

Are We Headed for a Recession? 

Predicting the future under this administration is nearly impossible, Tai admitted. But she observed that unlike in Trump’s first term, there’s now a much higher tolerance for economic change.  

While the recent stock market impact did not prompt a policy shift, a strong reaction from the bond market did coincide with a temporary pause in tariff actions—suggesting certain economic signals may carry more weight than others.   

Overall, she indicated that businesses and consumers should prepare for continued change in the near term. 

A Silver Lining: Americans Are Paying Attention 

Tai offered a hopeful note to end on. One upside of the current trade news is that people are finally paying attention. “Tariff policy is suddenly kitchen-table conversation,” she said, likening it to how supply chains became widely discussed during the pandemic. 

As someone who has long championed public understanding of trade policy, Tai sees this moment as an opportunity. The growing awareness among everyday Americans could lead to more informed discourse, civic engagement, and ultimately, better policymaking. 

“Trade policy has never been so popular—for better or worse,” she concluded. But with that popularity comes the potential for meaningful progress, if people choose to engage with the issues and demand clarity, responsibility, and fairness in how U.S. economic policy is shaped.