Next Foreign Trade Barrier Report May Inform US Trade Negotiations

Yesterday, the Office of the U.S. Trade Representative requested public input for the next edition of its annual National Trade Estimate Report on Foreign Trade Barriers to U.S. competitiveness. Given the Trump Administration’s extensive reliance on the prior edition of this report in shaping U.S. tariff policy, comments submitted may meaningfully influence future U.S. tariff and trade policy. The comment window closes October 30, 2025.

NTE Report and Trade Negotiations

The Trade Act of 1974 requires USTR to annually publish a National Trade Estimate Report on Foreign Trade Barriers, or NTE Report. This publication should outline significant foreign barriers to, or distortions of, U.S. exports of goods and services, including agricultural commodities and U.S. intellectual property; foreign direct investment by U.S. persons; and U.S. electronic commerce. Significantly, under U.S. law the NTE Report is supposed to be used to facilitate U.S. negotiations aimed at reducing or eliminating the identified barriers and ensuring trade is fair and reciprocal, as well as promoting U.S. economic and security interests.

Lately, such negotiations have been a significant focus of the Trump Administration, a process that was intensified earlier this year by the Administration’s introduction of “reciprocal” tariffs on nearly every U.S. trading partner. Since then, various “deals” have been announced with trading partners including the European Union, Japan, United Kingdom, and Indonesia — with other deals characterized as “coming” by Administration officials. Notably, the deals announced to date have regularly featured commitments by the trading partner to address policies and practices that were identified in the 2025 edition of the NTE Report. USTR Jameison Greer referenced the 2025 NTE Report in explaining the Trump Administration’s understanding of the fact base underlying the reciprocal tariffs in April 2025 Congressional hearings. Public input via the NTE Report shapes the Administration’s understanding of foreign trade policies, and may feature in U.S. trade negotiations with other countries.

Separately, the legal foundation for the “reciprocal” tariff regime remains uncertain pending the resolution of court challenges concerning the President’s reliance on the International Emergency Economic Powers Act. Even if the “reciprocal” tariffs are ultimately struck down, the Administration may instead base tariff regimes in other statutory authorities, e.g., Section 338 of the Tariff Act of 1930 or Section 301 of the Trade Act of 1974. Certain of these alternatives require investigations before action is taken. Thus, as a practical matter, the NTE Report may inform the fact base for such inquiries.

Comment Procedures and Focus Areas

USTR’s request yesterday reflects the Trump Administration’s significantly changed trade policy priorities when compared to the request issued a year ago under the Biden Administration.

Within the broad categories of foreign trade barriers that continue from last year’s request, a number of new focus areas have been identified by USTR. In particular, USTR references failures to take sufficient action to address burdensome policies originating in third countries, underscoring concerns over third-country transshipment identified in recent negotiations. Relatedly, a new catch-all category of “other non-market policies and practices” has also been introduced, which may inform the Trump Administration’s approach to defining “transshipment” as contemplated in various framework agreements. Finally, electronic commerce/digital trade has been eliminated as a standalone category, having been lumped together under a general services category; reference to “electronic commerce” was also removed from three sections concerning state-owned enterprises, labor, and environment.

The areas of focus and examples named in USTR’s notice follow:

1. Import policies, e.g., tariffs, quantitative restrictions, import licensing, tariffs, and inadequate trade facilitation or customs valuation practices. The 2026 list also introduces reference to duty evasion and circumvention, which comports with the Trump Administration’s focus on avoiding “transshipment” in its trade dealmaking.
2. Technical barriers to trade, e.g., trade restrictive or discriminatory standards, excessive conformity assessment procedures, or unnecessary technical regulations. To this, USTR’s 2026 notice adds labeling, imposing “unique national standards when international standards already exist in order to leverage the economic power of the domestic market to promote or compel the adoption of those standards in global markets,” pressuring third countries to define international standards so as to exclude standards developed by U.S.-domiciled standard development organization, and impeding U.S. or foreign stakeholder involvement in the overall standards development process.
3. Sanitary and phytosanitary measures, e.g., measures which unnecessarily restrict trade without furthering safety objectives. As compared to the prior list, this year broadens the scope from policies “not based on scientific evidence” to those “not based on science, or maintained without sufficient scientific evidence.”
4. Government procurement, e.g., closed bidding and bidding processes that lack transparency. This year’s list also makes mention of “policies which exclude U.S. goods and services.”
5. Intellectual property protection, e.g., inadequate patent, copyright, trade, secret, and trademark enforcement. In substance, these examples are the same as last year.
6. Services,g., prohibitions on foreign participation in the market, discriminatory licensing requirements or standards, local-presence requirements, and restrictive technology requirements. In addition to bringing “electronic commerce/digital trade” under the broader “services” umbrella, USTR’s 2026 list also adds mention of discriminatory “practices affecting trade in digital products” and “barriers to cross-border data flows.”
7. Investment, e.g., limitations on foreign equity participation, technology transfer requirements, restrictions on repatriation of earnings, and other similar measures. Mention of “local content requirements” is also introduced to this year’s list.
8. Subsidies: While export subsidies were named in both last year’s and this year’s request for comments, reference to import substitution subsidies has been newly introduced.
9. Anticompetitive practices: This was described as government-tolerated conduct that restricts the sale or purchase of U.S. goods and services in a foreign country’s markets in the past. In addition, this year’s request for comment introduces the “abuse of competition laws that inhibit trade, and fairness and due process concerns by companies involved in competition investigatory and enforcement proceedings in the country.”
10. State-owned enterprises (SOEs), e.g., subsidies and non-commercial advantages provided to and from SOEs and related practices that discriminate against U.S. goods and services. In substance, this is described in the same terms as last year.
11. Other non-market policies and practices was a newly introduced category this year. Examples include industrial plans pursuing industry-specific dominance, actions to ensure domestic enterprises purchase domestic-made products over U.S. products, non-market excess capacity, especially in key sectors, and permitting regulatory authorities to exercise their authority in a discriminatory manner. As with the modifications to the “import policies” topic area, this also concludes with an example that underscores the Trump Administration’s concern with transshipment, e.g., “failures to take effective action to address non-market policies and practices of third countries.”
12. Labor, e.g., violations of international labor rights which influence trade flows or investment decision ultimately affecting U.S. firms and workers. A list of examples of international labor rights is provided, which is substantively the same as last year. However, the most recent comment request introduces a more general mention of “other practices that contribute to the suppression of wages.”
13. Environment: This topic area has been significantly altered, although the main focus on substandard legal frameworks and weak environmental enforcement remains largely consistent. Reference to “unsustainable stewardship of natural resources” is removed, in favor of “significant acts of environmental degradation” and “illegal harvesting and trade of natural resources.” The basket category of “harmful environmental practices’ is also refocused on such practices that “provide a benefit or incentive to producers or investors in that country.”
14. Other barriers, e.g., barriers not previously covered which could encompass more than one category, such as corruption and bribery. This final, catch-all category is unchanged from last year.

USTR requests that commentators place special emphasis on any practices that may violate any U.S. trade agreements. As a practical matter, this likely extends to the various trade “deals” announced this year. Updates or new information about the barriers covered in the 2025 NTE Report are also of interest.

USTR’s notice also features a lengthy list of target export markets. While this year’s list is largely the same as last year, four countries have been added: Bosnia and Herzegovina, Moldova, North Macedonia, and Serbia. Notwithstanding the identification of focus countries, comments with respect to any country may be submitted, and commenters should label their comments as associated with one or more specific countries.

Interested parties may submit comments online via regulations.gov (Docket No. USTR-2025-0016) by October 30, 2025.

Conclusion

In a dynamic policy environment, planning for what comes next helps businesses stay ahead of the curve. Cassidy Levy Kent’s supply chain management practice has extensive experience assisting companies to adapt to a changing regulatory landscape. Our attorneys, economists, compliance experts, and licensed customs brokers are ready to help companies stay informed, engage with decision-makers, and develop strategic responses. We regularly assist clients in designing comments for consideration by USTR and other governmental decisionmakers. Please contact us if you have any questions or need assistance.