U.S. Trade Policy Shifts Toward Bilateral Deals with Canada, Mexico and India

The U.S. government is continuing to advance its strategy of bilateral trade agreements. As the multilateral trade policy of past decades is increasingly replaced by targeted individual agreements, Washington is pursuing the goal of aligning supply chains more closely with the United States, improving market access for American companies and using trade policy pressure as an instrument of foreign economic policy.

In recent weeks, the Office of the United States Trade Representative (USTR) has advanced several initiatives. These include negotiations with Canada and Mexico as part of the ongoing review of the USMCA agreement, as well as new talks on reciprocal trade arrangements with additional partner countries. USTR chief Jamieson Greer recently said that the administration intends to review trade agreements regularly in the future and align them more closely with the economic policy interests of the United States.

Bilateral agreements are gaining importance

At the center of the strategy are so-called “Reciprocal Trade Agreements.” According to the administration, these are intended to regulate tariffs, market access and investment conditions at the bilateral level. In contrast to traditional free trade agreements, Washington places greater emphasis on reciprocity and on the ability to adjust trade conditions at short notice.

The United States signed a new trade agreement with Jordan as early as July. At the same time, talks with Mexico are under way on the review of the USMCA agreement. Other countries are also on the USTR agenda. The aim is to link trade advantages more closely with the industrial and security policy interests of the United States.

Canada remains the most difficult negotiating partner

Relations with Canada remain particularly tense. Representatives of both countries held another round of intensive talks in Washington in early August on a comprehensive trade agreement. According to Canadian Trade Minister Dominic LeBlanc, the meetings were “constructive and detailed.” The focus is on solutions to existing tariff disputes and sector-specific trade barriers.

At the same time, the U.S. government is sharpening its tone. President Donald Trump recently announced additional tariffs on Canadian products and publicly criticized the negotiations. Canadian Prime Minister Mark Carney subsequently described the talks as “difficult,” but emphasized his government’s willingness to pursue a long-term agreement.

India pushes for a rapid conclusion

India is also seeking a rapid agreement with Washington. A parliamentary committee in New Delhi called on the government to accelerate negotiations on a bilateral trade agreement. The background is the recent tightening of U.S. tariffs on numerous imported goods, as well as the desire for greater planning certainty for Indian exporters.

According to the Indian side, the agreement should cover not only traditional industrial goods but also future-oriented sectors such as semiconductors, artificial intelligence, digital services and critical raw materials. At the same time, India is seeking exemptions from possible future U.S. tariff increases.

Trade policy becomes part of industrial policy

The U.S. government is increasingly linking trade agreements with industrial policy objectives. New agreements are intended to promote investment in American production, decouple supply chains from geopolitical risks and strengthen domestic industry. At the same time, trading partners are being called on to create comparable market conditions for U.S. companies.

This strategy is also reflected in numerous Section 301 proceedings and new investigations into trading partners. In addition to traditional tariff issues, topics such as forced labor, intellectual property, subsidies and production locations now play a central role.

Companies demand greater planning certainty

For internationally active companies, the high pace of change in U.S. trade policy remains a challenge. While new bilateral agreements can open up additional market opportunities, frequent adjustments to tariffs and trade rules create uncertainty along global supply chains.

Business associations are therefore watching the ongoing talks with Canada, Mexico and India in particular. A successful conclusion could stabilize important trade flows and facilitate investment decisions. At the same time, the U.S. government is likely to continue its course of using trade agreements more strongly as an instrument of economic and geopolitical interests.

American trade policy is therefore increasingly shifting from an approach focused on free trade toward a model that combines market access, industrial competitiveness and national security interests. For companies worldwide, this means that trade agreements will in future carry not only economic but increasingly also strategic significance.