President Donald Trump recently declared a national emergency due to "an extraordinary threat to U.S. national and economic security arising from conditions reflected in large and persistent annual U.S. goods trade deficits," according to a statement given by the United States at the World Trade Organization (WTO). In the years 2023 and 2024, U.S. trade deficits exceeded $1 trillion, markedly larger than other WTO members, with India's deficit standing at $245 billion in 2023.
President Trump attributed the growing U.S. trade deficits to "a lack of reciprocal trading relationships," which has, in his view, led to a decline in national manufacturing capacity. "The President has concluded that this lack of domestic manufacturing capacity has undermined critical supply chains and compromised defense-preparedness," the statement noted.
To mitigate these trade-related challenges, President Trump imposed additional ad valorem duties under the International Economic Emergencies Powers Act. These tariffs may be renewed yearly if Congress is informed that the emergency persists. The President reserved the right to alter these duties based on the behavior of trading partners.
In response to what the White House described as "PRC retaliation against U.S. exports," the President increased China's duty rate to 125%. Conversely, a temporary reduction to 10% was applied for a ninety-day period to over 75 nations willing to discuss U.S. concerns.
The statement emphasized that the United States is not "altering or abrogating its WTO tariff bindings or commitments." Instead, the actions are claimed to be "necessary for the protection of its essential security interests," invoking the WTO Agreement's essential security exception.