President Trump’s second term officially began on January 20, 2025, but concerns about his strict trade policies have been building since his presidential campaign. On his first day back in office, Trump wasted no time issuing a presidential memorandum, setting the stage for aggressive trade policy shifts designed to bolster America’s economy in the wake of a tumultuous stretch under the Biden administration. This directive, titled the "America First Trade Policy" memorandum, mandates federal agencies to propose new trade enforcement measures by April 1, 2025. For businesses engaged in global trade, this marks the beginning of heightened scrutiny, increased tariffs, and evolving compliance requirements.
Shippers operating in global markets must stay ahead. As President Trump returns to the White House, supply chain managers and their Microsoft D365 partners must prepare for potential tariff changes, trade restrictions, and heightened sanctions. D365 enables organizations to track and manage compliance data efficiently, ensuring that regulatory requirements are met seamlessly. By integrating compliance tracking within shipping and operational workflows, businesses can reduce errors, prevent shipment delays, and avoid regulatory fines. A proactive compliance strategy is, more than ever, a necessity.
The Challenge: Uncertainty in Trade Policies
One of the defining characteristics of Trump’s first term was through imposing a strong stance on trade regulations, which translated to steep tariff hikes and expanded sanctions. The "America First Trade Policy" memorandum clearly directs how he plans on conducting his second term. As a result, shippers must upgrade their D365 supply chain operations to manage the incoming shifts:
Increased Tariffs: The administration is considering significant tariff hikes, including a 25% tariff on goods from Canada and Mexico, a 100% tariff on imports from BRICS nations (Brazil, Russia, India, China, and South Africa), and a 10–20% increase for other countries. These additional costs will impact sourcing strategies, force businesses to reconsider supplier networks, and potentially increase prices for end consumers.
Expanded Trade Restrictions: Country-of-origin claims will be scrutinized more closely, particularly regarding imports from China. Customs authorities will be tasked with enforcing stricter compliance measures, including audits and documentation checks on both imports and exports. Shippers must confirm that their supply chain data is accurate and ensure their suppliers comply with new reporting requirements in order to avoid delays and financial penalties.
Stronger Enforcement of Sanctions: U.S. regulators will likely expand the list of restricted parties and strengthen the Uyghur Forced Labor Prevention Act (UFLPA) enforcement. Businesses that source materials or manufacture products in high-risk regions will face increased scrutiny, higher compliance costs, and potential shipment seizures if due diligence measures are not in place. (Uyghur Forced Labor Prevention Act)
Stricter Export Controls: The U.S. government is set to impose new restrictions on sensitive technology exports, particularly to China and other geopolitical rivals. This will affect businesses in the high-tech, semiconductor, and defense industries, requiring them to reassess their export compliance programs and implement stricter transaction controls. (Husisian et al.)
For companies relying on cross-border trade, these risks can translate into operational disruptions, legal penalties, and financial losses.
The Opportunity: Strengthening Compliance for a Competitive Edge
While these changes introduce risks, they (more importantly) provide an opportunity for D365 shippers to reinforce trade compliance strategies and bolster supply chain resilience. Supply chain operators that invest in robust compliance solutions and partner with experienced ISVs who understand the trade and compliance shipping space will not only mitigate risks but also maintain smoother operations, avoid costly penalties, and foster trusted trade relationships. Consulting industry experts can ensure businesses stay ahead of regulatory changes and leverage best practices for seamless compliance management.
Practical Steps for Compliance Readiness
To navigate this evolving trade landscape, businesses should:
Evaluate USMCA Compliance: Companies operating in North America must assess their exposure to potential changes in USMCA terms and conduct internal audits to ensure their product information matches the regulatory and classification information required in any revised trade agreements. Proper and accurate documentation of origin and qualification criteria is essential to preventing trade disruptions and potential audits. With profit margins already being stretched, shippers can’t afford data entry missteps that result in documentation errors. (Husisian et al.)
Plan for Tariff Volatility: With fluctuating tariffs, businesses should develop flexible supply chain strategies; diversifying suppliers, nearshoring, and leveraging duty-saving programs like bonded warehouses and Foreign-Trade Zones (FTZs). These measures can help mitigate the financial impact of new tariffs and provide cost-saving opportunities.
Enhance Supply Chain Integrity: Implementing strong due diligence practices, such as supplier audits, traceability tools, and compliance certifications, will help businesses minimize risks associated with increased trade restrictions. Microsoft D365 shipping solutions that integrate with powerful screening platforms enable organizations to centralize supplier information, automate compliance tracking, and integrate shipping modules for greater transparency. By leveraging these capabilities, businesses can reduce compliance missteps, streamline reporting, and ensure adherence to new enforcement measures.
Upgrade Screening Processes: Automated compliance tools like NMB Gateway for RPS can streamline restricted (or denied) party screening, ensuring that all business transactions are reviewed against the latest trade regulations. By integrating with Descartes’ Visual Compliance platform, NMB Gateway for RPS leverages state-of-the-art screening capabilities, including AI-assisted compliance checks that enhance accuracy and efficiency. Businesses should incorporate these solutions into their existing ERP systems for seamless compliance management and proactive risk mitigation.
Prepare for Partner Agency Regulations: Compliance extends beyond trade tariffs and sanctions. Businesses must also adhere to regulations from agencies like the FDA, NHTSA, EPA, among others. Microsoft D365 enables businesses to track and manage compliance data efficiently, ensuring that regulatory requirements are met seamlessly. By integrating compliance tracking within shipping and operational workflows, businesses can reduce errors, prevent shipment delays, and avoid regulatory fines.
Strengthen Internal Compliance Training: Trade regulations are changing rapidly, making it critical for employees across all departments to stay informed. Regular compliance training sessions should be conducted to reduce errors, enhance adherence to new policies, and build a culture of regulatory awareness within the organization.
How NMB Gateway for RPS Can Help
NMB Gateway for Restricted Party Screening (RPS) integrates with Microsoft D365 Finance & Supply Chain to provide real-time compliance checks, helping businesses:
Stay Ahead of Regulatory Changes: With automatic updates, businesses can ensure that their screening processes align with the latest trade restrictions, embargoes, and sanctions. This reduces the risk of accidental violations and ensures smooth operations even as regulations shift.
Avoid Costly Violations: Businesses can prevent unintentional dealings with blacklisted entities by proactively identifying restricted parties before transactions occur. This helps avoid legal penalties and protects a company’s reputation in the marketplace.
Streamline Compliance Processes: The system automates screening workflows, eliminating manual processes prone to human error. This increases efficiency, reduces administrative burden, and ensures compliance is consistently applied across all transactions.
Enhance Risk Management: Businesses can demonstrate due diligence in supplier and customer relationships by maintaining thorough audit trails and compliance records. This minimizes the threat of regulatory fines, shipment holds, and reputational damage due to compliance failures.
The Next Step
As trade policies shift, preparation is key. Organizations that take a proactive approach to compliance will be better positioned to adapt, mitigate risks, and maintain strong global trade relationships. Ensure your business is equipped with the right tools to handle compliance challenges.
Read more about how NMB Gateway for RPS can support your supply chain operation: https://www.nmbsolutions.ca/gateway-for-rps
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Reference List
"Uyghur Forced Labor Prevention Act." U.S. Customs and Border Protection, https://www.cbp.gov/trade/forced-labor/UFLPA
"America First Trade Policy." The White House, 20 Jan. 2025, https://www.whitehouse.gov/presidential-actions/2025/01/america-first-trade-policy/.
"What Every Multinational Company Should Know About … Managing Import Risks Under the New Trump Administration (Part I): Identifying Risks and Opportunities." Husisian, Gregory et al., 8 Jan. 2025, https://www.foley.com/insights/publications/2025/01/multinational-company-managing-import-risks-new-trump-administration-i/.
"What Every Multinational Company Should Know About … Managing Import Risks Under the New Trump Administration (Part II): The Implications of President Trump’s 'America First Trade Memorandum'." Husisian, Gregory et al., 23 Jan. 2025, https://www.foley.com/insights/publications/2025/01/multinational-company-import-risks-new-trump-administration-part-ii/.
"What Every Multinational Company Should Know About … Managing Import Risks Under the New Trump Administration (Part III): Practical Steps for Importers." Husisian, Gregory et al., 30 Jan. 2025, https://www.foley.com/insights/publications/2025/01/multinational-company-managing-import-risks-new-trump-administration-iii/
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