October 8, 2025

ALI Perspective

Last week, the President announced tariffs on pharmaceuticals, trucks, kitchen cabinets, and upholstered furniture, and promised to implement a 100% tariff on semiconductors made abroad. While there are caveats and carve-outs, these tariffs will nonetheless cause significant rippling effects throughout the economy.

In September, the Department of Commerce also initiated two new Section 232 investigations targeting robotics, industrial machinery, personal protective equipment, medical consumables, and medical equipment, which will likely pave the way to additional tariffs.

According to The Budget Lab at Yale, the average U.S. tariff in August rose to approximately 17.7%, the highest since 1934, representing a 15.3 percentage point increase from pre-2025 levels. This level will only increase once the new tariffs are implemented. Tariffs are effectively a tax on working Americans and are expected to increase consumer prices by approximately 1.8% in the short term, equating to a loss of about $2,600 per household, in addition to resulting in lower GDP growth and job losses.

The full impact of these tariffs will continue to unfold over the next year, reshaping the American economy, increasing prices, and causing job losses. American Leadership Initiative’s new project, Revitalize America, is designed to confront these challenges head-on and develop a new vision for American economic leadership through reimagining trade and economic alliances for the 21st century.

Coming Up

Fireside Chat on Strengthening American Jobs, Tech, and Trade

Thursday, October 30 at 8:30am-9:45am

Senator Maria Cantwell (D-WA)

David Lynch

Washington Post Reporter and Author of "The World's Worst Bet"

U.S.-China Technology Competition

Biotechnology, Semiconductors, and Quantum

Webinar

Thursday, November 13 at 9am-10:15am

Melanie Hart

Senior Director, Global China Hub,

Atlantic Council

Jimmy Goodrich

Senior Adviser for Technology Analysis,

RAND Corporation

Constanza M. Vidal Bustamante

Fellow, Technology and National Security Program,

Center for a New American Security

ICYMI

ALI hosted a virtual conversation with Alexandra Whittaker (House Ways and Means Subcommittee on Trade) and Emma Bruce (House Foreign Affairs Subcommittee on East Asia and the Pacific) on the substance and politics of the fall trade agenda. Both expressed deep concern about the foreign policy implications of Trump’s tariffs, voicing their frustration at the lack of transparency around the administration’s negotiations. With no clear insight into the process, they emphasized the uncertainty surrounding potential fallout with allies and the challenges of mitigating it.

Concerns were raised about the absence of a coherent Administration China strategy, the misuse of IEEPA as a political tool against Brazil and as a negotiating threat with India, and concern regarding AGOA renewal.

What We're Reading

Brookings: Is China Circumventing US Tariffs Via Mexico and Canada?

"The U.S., Mexico, and Canada should work together, along with industry and other stakeholders, to review their trade and investment policies toward China, identify where differences create risks of Chinese goods entering each of their markets through one of the other partner markets, and then align their approaches to plug these gaps. Progress here would strengthen North America as an economic unit and underscore that U.S. strategic goals with respect to China are best achieved by working within North America rather than going it alone."

Washington Post: Trump Wanted to Extend a Key U.S.-Africa Trade Agreement. It Expired Anyway.

"That Washington let AGOA expire for the first time in the program’s history raises questions about the United States’ commitment to Africa", experts said. Trump kick-started his “America First” foreign policy agenda earlier this year by eliminating tens of billions of dollars in foreign assistance. Some analysts warn that the loss of AGOA diminishes the U.S. presence in Africa and creates an opening for rival powers like China and Russia to expand their influence."

Bloomberg: Huawei Used TSMC, Samsung, SK Hynix Components in Top AI Chips

"Huawei Technologies Co. used advanced components from Asia’s largest technology firms in at least some of its leading Ascend AI processors, a research firm discovered during teardowns, highlighting China’s reliance on foreign hardware as it works to boost domestic production of AI semiconductors. TechInsights discovered gear from Taiwan Semiconductor Manufacturing Co., Samsung Electronics Co. and SK Hynix Inc. in multiple samples of Huawei’s third-generation Ascend 910C chips, the firm said in a statement."

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