The evolving global economic landscape is increasingly being shaped by bilateral and multilateral trade negotiations that unfold on a case-by-case basis. Rather than adhering to broad, standardized frameworks, the U.S. is engaging with its top trading partners through individualized agreements, each tailored to the distinct economic, political, and strategic dynamics of the relationship. This approach reflects the complex realities of modern geopolitics, where national interests, supply chain vulnerabilities, and sector-specific concerns necessitate targeted trade strategies.
However, this individualized approach also introduces uncertainty. Tariffs, originally conceived as temporary leverage points, may persist beyond their intended scope, creating ongoing friction and potential disruption. As each trade relationship is examined independently, the framework for negotiation must be fluid, allowing for strategic concessions and recalibrations without the assumption of uniform enforcement mechanisms.
The following sections outline the specific negotiation focuses, potential wins, and key risks associated with the United States’ top 20 trading partners. Each entry underscores the importance of maintaining a flexible yet focused negotiation stance that balances domestic economic imperatives with broader geopolitical considerations.
The Goals of U.S. trade with:
The Results:
1. Mexico
Top 3 S&P 500 Sectors Affected: Consumer Discretionary, Industrials, Materials
Trade Relationship Size (Imports vs. Exports):
Imports: $402 billion (primarily automotive parts, electronics, and agricultural products)
Exports: $374 billion (notably vehicles, machinery, and plastics)
Negotiation Focus: Addressing recent U.S. tariffs of 25% on most Mexican imports, which have strained the USMCA framework. Mexico has delayed retaliatory measures, emphasizing diplomatic engagement.
Definition of a Win: Successful renegotiation of tariff rates to levels more aligned with USMCA principles, ensuring stable cross-border trade in key sectors (automotive, agriculture, electronics).
Risks and Hold-Ups: Political tensions over immigration and border security, conflicting priorities in labor and environmental regulations, and potential retaliation through tariffs on U.S. agricultural exports. Domestic pressure from U.S. auto and manufacturing sectors to maintain protections may impede progress.
No deal is in writing
2. Canada
Top 3 S&P 500 Sectors Affected: Energy, Industrials, Consumer Staples
Trade Relationship Size (Imports vs. Exports):
Imports: $360 billion (notably crude oil, vehicles, and machinery)
Exports: $340 billion (primarily automotive, machinery, and natural gas)
Negotiation Focus: Navigating U.S. tariffs of 25% on most imports (10% on energy), which Canada contends violate USMCA provisions.
Definition of a Win: Restoring pre-tariff trade flows with minimal disruption to energy and automotive supply chains, while maintaining preferential access for Canadian oil and gas exports to the U.S. market.
Risks and Hold-Ups: Prolonged WTO dispute, potential counter-tariffs targeting U.S. goods, and Canadian backlash over perceived U.S. protectionism. U.S. domestic producers lobbying to maintain tariff protections could complicate negotiations.
No deal is in writing
3. China
Top 3 S&P 500 Sectors Affected: Technology, Consumer Discretionary, Communication Services
Trade Relationship Size (Imports vs. Exports):
Imports: $485 billion (notably electronics, machinery, and textiles)
Exports: $247 billion (primarily aircraft, soybeans, and semiconductors)
Negotiation Focus: Resolving mutual tariffs—U.S. tariffs up to 245% on Chinese goods and China’s 125% tariffs on U.S. imports.
Definition of a Win: Reduction in tariffs on key sectors like electronics and machinery, resulting in lower costs for U.S. consumers and businesses. Formal agreements on data security and intellectual property protections.
Risks and Hold-Ups: Ongoing geopolitical tensions over Taiwan, espionage concerns, and disputes over China’s industrial subsidies. Domestic pressure to maintain tariffs on Chinese goods due to perceived unfair trade practices and national security risks.
No deal is in writing
4. Germany
Top 3 S&P 500 Sectors Affected: Industrials, Consumer Discretionary, Technology
Trade Relationship Size (Imports vs. Exports):
Imports: $134 billion (automotive, machinery, pharmaceuticals)
Exports: $83 billion (aerospace, agricultural equipment, chemicals)
Negotiation Focus: Addressing U.S. tariffs and EU digital service taxes affecting U.S. tech firms.
Definition of a Win: Agreement to reduce or eliminate tariffs on automotive and industrial goods while protecting U.S. tech sector interests.
Risks and Hold-Ups: Germany’s strict environmental standards, EU’s push for digital service taxes, and U.S. concerns over European data privacy laws.
No deal is in writing
5. Japan
Top 3 S&P 500 Sectors Affected: Consumer Discretionary, Technology, Industrials
Trade Relationship Size (Imports vs. Exports):
Imports: $127 billion (automobiles, machinery, electronics)
Exports: $91 billion (agricultural products, aircraft, medical devices)
Negotiation Focus: Expanding U.S. agricultural access and reducing auto import tariffs.
Definition of a Win: Increased market share for U.S. agricultural exports and lower tariffs on U.S. auto exports.
Risks and Hold-Ups: Japan’s domestic agricultural protections, U.S. tariff threats on autos, and ongoing regional security tensions.
No deal is in writing
6. South Korea
Top 3 S&P 500 Sectors Affected: Technology, Industrials, Consumer Discretionary
Trade Relationship Size (Imports vs. Exports):
Imports: $92 billion (semiconductors, electronics, automobiles)
Exports: $72 billion (industrial machinery, defense equipment, pharmaceuticals)
Negotiation Focus: Ensuring stability in the Korea-U.S. Free Trade Agreement (KORUS).
Definition of a Win: Strengthening semiconductor supply chains and securing greater market access for U.S. defense and pharma sectors.
Risks and Hold-Ups: Concerns over North Korean instability, U.S. pressure on Korean auto tariffs, and potential disputes over data privacy.
No deal is in writing
7. United Kingdom
Top 3 S&P 500 Sectors Affected: Financials, Industrials, Consumer Discretionary
Trade Relationship Size (Imports vs. Exports):
Imports: $75 billion (vehicles, pharmaceuticals, machinery)
Exports: $65 billion (aerospace, chemicals, financial services)
Negotiation Focus: Implementing the newly announced trade agreement with reductions in key tariffs.
Definition of a Win: U.S. financial services gain greater access to UK markets, and aerospace exports receive tariff relief.
Risks and Hold-Ups: Diverging regulatory standards post-Brexit, UK’s stance on data privacy, and ongoing banking sector reforms.
What we know: May 8th, 2025
On May 8, 2025, the U.S. and UK announced a comprehensive trade agreement aimed at reducing tariffs and boosting market access. Key sectors impacted include automotive, steel and aluminum, agriculture, aerospace, and pharmaceuticals.
Key Provisions:
Automotive: U.S. tariffs on UK cars drop from 27.5% to 10% for 100,000 vehicles annually.
Steel and Aluminum: 25% tariffs eliminated, benefiting UK exports.
Agriculture: UK gains tariff-free quota for 13,000 metric tonnes of beef; UK removes 19% tariff on U.S. ethanol.
Aerospace: British aerospace exports go tariff-free; UK airline commits to $10 billion Boeing purchase.
Pharmaceuticals & Tech: Collaboration on AI, bioengineering, and quantum physics.
Analysis:
The deal strengthens bilateral trade, especially in key manufacturing sectors. However, concerns remain over U.S. beef imports affecting UK farmers and unresolved issues in digital services taxes and broader tariff reductions. Ongoing negotiations will be crucial for maximizing mutual benefits.
8. Vietnam
Top 3 S&P 500 Sectors Affected: Consumer Discretionary, Technology, Industrials
Trade Relationship Size (Imports vs. Exports):
Imports: $90 billion (electronics, textiles, footwear)
Exports: $30 billion (agriculture, machinery, chemicals)
Negotiation Focus: Addressing trade imbalances and ensuring labor and environmental standards compliance.
Definition of a Win: Reducing tariffs on U.S. agricultural products and expanding electronics trade.
Risks and Hold-Ups: Labor rights issues, environmental concerns, and Vietnam’s growing reliance on Chinese components.
No deal is in writing
9. India
Top 3 S&P 500 Sectors Affected: Pharmaceuticals, Technology, Consumer Discretionary
Trade Relationship Size (Imports vs. Exports):
Imports: $85 billion (textiles, pharmaceuticals, IT services)
Exports: $60 billion (agriculture, aircraft, defense equipment)
Negotiation Focus: Resolving U.S. concerns over market access and IP rights.
Definition of a Win: Expanded access for U.S. agricultural exports and stronger IP protections for pharmaceuticals.
Risks and Hold-Ups: India’s domestic tech protectionism, U.S. agricultural subsidies, and tensions over pharmaceutical pricing controls.
No deal is in writing
10. Italy
Top 3 S&P 500 Sectors Affected: Consumer Discretionary, Industrials, Healthcare
Trade Relationship Size (Imports vs. Exports):
Imports: $60 billion (notably luxury goods, machinery, and vehicles)
Exports: $48 billion (primarily aircraft, electronics, and chemicals) Negotiation Focus: Navigating EU-wide issues affecting trade, including digital taxes and regulatory standards impacting U.S. tech firms.
Definition of a Win: Reduced barriers to U.S. tech and industrial exports, while avoiding EU penalties on major American companies operating in Italy.
Risks and Hold-Ups: Italy’s alignment with broader EU regulatory frameworks, digital tax enforcement, and conflicting cultural standards in food and agricultural imports.
No deal is in writing
11. France
Top 3 S&P 500 Sectors Affected: Consumer Discretionary, Healthcare, Industrials
Trade Relationship Size (Imports vs. Exports):
Imports: $55 billion (primarily luxury goods, aircraft, and wine)
Exports: $45 billion (notably aircraft, machinery, and pharmaceuticals) Negotiation Focus: Resolving disputes over digital service taxes and aligning on standards affecting bilateral trade.
Definition of a Win: Rolling back digital taxes that disproportionately affect U.S. companies and ensuring greater market access for U.S. services and manufactured goods.
Risks and Hold-Ups: France’s strong advocacy for sovereign tax policy, environmental protection clauses in trade agreements, and consumer resistance to certain U.S. products.
No deal is in writing
12. Brazil
Top 3 S&P 500 Sectors Affected: Agriculture, Energy, Industrials
Trade Relationship Size (Imports vs. Exports):
Imports: $70 billion (agriculture, energy, aircraft)
Exports: $60 billion (technology, chemicals, pharmaceuticals)
Negotiation Focus: Enhancing cooperation in energy and agriculture, while addressing environmental concerns related to trade.
Definition of a Win: Improved access to Brazilian agricultural products, joint initiatives on biofuels, and market access for U.S. tech and pharmaceutical sectors.
Risks and Hold-Ups: Environmental concerns over deforestation, agricultural subsidies, and political instability.
No deal is in writing
13. Netherlands
Top 3 S&P 500 Sectors Affected: Technology, Industrials, Healthcare
Trade Relationship Size (Imports vs. Exports):
Imports: $40 billion (primarily electronics, pharmaceuticals, and machinery)
Exports: $35 billion (notably aircraft, biotech, and agricultural products) Negotiation Focus: Facilitating trade through the Netherlands’ role as a key logistics hub in Europe, while addressing EU-wide trade issues.
Definition of a Win: Smooth customs processes and reduced delays at Dutch ports for U.S. goods, coupled with bilateral cooperation in biotech, agriculture, and clean energy.
Risks and Hold-Ups: EU-level regulatory challenges, digital policy conflicts, and potential limitations in Dutch infrastructure due to broader European logistics constraints.
No deal is in writing
14. Taiwan
Top 3 S&P 500 Sectors Affected: Technology, Industrials, Materials
Trade Relationship Size (Imports vs. Exports):
Imports: $45 billion (notably semiconductors, electronics, and machinery)
Exports: $20 billion (primarily agricultural products, aircraft, and chemicals) Negotiation Focus: Strengthening supply chain resilience, particularly in semiconductors, and addressing geopolitical tensions affecting trade.
Definition of a Win: Long-term semiconductor supply agreements, enhanced bilateral cooperation in technology innovation, and strategic trade alignment on rare earths and advanced manufacturing.
Risks and Hold-Ups: Rising tensions with China, political sensitivities surrounding U.S.-Taiwan relations, and export control disagreements on sensitive tech.
No deal is in writing
15. Switzerland
Top 3 S&P 500 Sectors Affected: Healthcare, Financials, Industrials
Trade Relationship Size (Imports vs. Exports):
Imports: $50 billion (primarily pharmaceuticals, machinery, and watches)
Exports: $42 billion (notably biotech, financial services, and chemicals)
Negotiation Focus: Maintaining strong bilateral trade relations, with emphasis on intellectual property rights and financial services.
Definition of a Win: Expanded access to Swiss financial markets for U.S. institutions, stronger IP protections for biotech and pharma, and harmonization of financial compliance standards.
Risks and Hold-Ups: Swiss neutrality and independence in international finance, resistance to U.S. tax disclosure requirements, and tensions around pharmaceutical pricing controls.
No deal is in writing
16. Belgium
Negotiation Focus: Addressing EU-wide trade policies and ensuring smooth transatlantic trade flows.
Definition of a Win: Maintaining access to key European distribution networks while resolving tariff disputes and regulatory barriers.
Risks and Hold-Ups: EU digital service tax disputes, regulatory challenges affecting U.S. pharma and biotech, and potential retaliatory tariffs on U.S. goods.
No deal is in writing
17. Israel
Top 3 S&P 500 Sectors Affected: Defense, Technology, Healthcare
Trade Relationship Size (Imports vs. Exports):
Imports: $20 billion (defense equipment, medical devices, pharmaceuticals)
Exports: $28 billion (technology, software, agricultural products)
Negotiation Focus: Enhancing cooperation in defense and technology sectors, while addressing regional security concerns impacting trade.
Definition of a Win: Expanded cooperation in cybersecurity and defense technology, with broader market access for U.S. pharmaceuticals.
Risks and Hold-Ups: Regional instability, cybersecurity threats, and U.S. concerns over intellectual property protections.
No deal is in writing
18. Singapore
Top 3 S&P 500 Sectors Affected: Energy, Materials, Financials
Trade Relationship Size (Imports vs. Exports):
Imports: $30 billion (metals, minerals, agricultural products)
Exports: $34 billion (energy equipment, defense, financial services)
Negotiation Focus: Expanding cooperation in critical minerals and defense, while addressing agricultural market access.
Definition of a Win: Securing access to Australian critical minerals for U.S. tech and defense sectors, while expanding U.S. agricultural exports.
Risks and Hold-Ups: Environmental restrictions, Australian resistance to U.S. energy tariffs, and local political pressure on agricultural imports.
No deal is in writing
19. Australia
Top 3 S&P 500 Sectors Affected: Energy, Materials, Financials
Trade Relationship Size (Imports vs. Exports):
Imports: $30 billion (metals, minerals, agricultural products)
Exports: $34 billion (energy equipment, defense, financial services)
Negotiation Focus: Expanding cooperation in critical minerals and defense, while addressing agricultural market access.
Definition of a Win: Securing access to Australian critical minerals for U.S. tech and defense sectors, while expanding U.S. agricultural exports.
Risks and Hold-Ups: Environmental restrictions, Australian resistance to U.S. energy tariffs, and local political pressure on agricultural imports.
No deal is in writing
20. Malaysia
Top 3 S&P 500 Sectors Affected: Technology, Consumer Discretionary, Industrials
Trade Relationship Size (Imports vs. Exports):
Imports: $45 billion (electronics, machinery, palm oil)
Exports: $20 billion (agriculture, chemicals, machinery)
Negotiation Focus: Ensuring compliance with labor and environmental standards, and enhancing participation in regional supply chains.
Definition of a Win: Strengthening supply chains for electronics and machinery while establishing joint environmental and labor standards.
Risks and Hold-Ups: Allegations of forced labor in supply chains, deforestation concerns, and competition from China.
No deal is in writing