US Trade Nominee Proposes Universal Tariffs to Combat Nearshoring

Jamieson Greer, nominated by the US President for Trade Representative, emphasized that the implementation of a universal tariff on US imports should be considered as a strategic measure to address manufacturing outsourcing, which has been advantageous to Mexico through nearshoring. Greer also emphasized that these measures will strengthen the manufacturing base in response to global instability, while preserving US leverage and safeguarding its citizens.

"The universal tariff should be thoroughly examined to assess its potential to reverse outsourcing trends," he stated. If his nomination is confirmed, Greer will play a key role alongside the Department of Commerce in executing the tariffs that Trump has threatened against Mexico and Canada. "America must transform into a nation of producers. We are more than mere consumers. Americans deserve the opportunity to work in well-paying jobs that generate goods and services capable of being sold both domestically and globally to support a decent livelihood," Greer asserted.

He further emphasized that US workers have the potential to compete with anyone, both at national and international level, provided they are given a level playing field and the opportunity to succeed. "Ensuring that all Americans, regardless of their background, have access to dignified employment as producers and builders is essential for both economic mobility and social unity. If confirmed, I will make it my priority to push for trade policies that create high-paying jobs."

Experts highlighted that, while US tariffs are primarily aimed at the trade of goods and services, they can also significantly influence FDI flows. Conor Finnegan, Consultant, FDI Center, stressed that it will be essential to guide investors in adopting dual strategies: establishing geographically diversified supply chains and crafting contingency plans to address sudden policy changes.

A Harvard University study reveals that the US-China trade war between 2017 and 2018 triggered significant trade rerouting. By 2021, the study found that 16.1% of Vietnamese exports to the United States were rerouted at the product level, compared to only 1.8% at the firm level, translating to US$15.5 billion and US$1.7 billion annually, respectively. The study highlighted that, even before Trump’s tariff proposals, the COVID-19 and escalating geopolitical tensions had already pushed businesses to prioritize the resilience of their supply chains, leading to a surge in nearshoring. Natixis Asia-Pacific, Chief Economist, Alicia-Garcia Herrero said that regardless of whether tariffs are implemented, the prevailing uncertainty could further accelerate the rerouting trend, as companies increasingly focus on flexibility and adaptability in the face of unpredictable policy shifts.