– This is the script of CNBC's news report for China's CCTV on February 14, Tuesday.
Welcome to CNBC Business Daily, I'm Qian Chen.
Trump has not announced his trade policies in details, but they have already caused many worried.
According to a FT report, the EU and other US trading partners have started to prepare the groundwork for a legal challenge to a US border tax proposal. If to trigger a suit, it's gonna be the biggest case in the WTO history.
The preliminary moves come as Republicans in Congress are trying get Trump on board to support a major shake-up of the US corporate tax system that would include a new "border adjustment" system.
The new tax system would make US imports subject to tax and export revenues exempted.
Were the US to adopt the mechanism, it would represent the biggest shake-up in the global corporate tax system in almost a century, according to tax experts.
Members of the WTO and trade experts warn that if the US makes the tax change, it would lead to a major challenge to the global trading system at a time when its most influential member is tilting toward protectionism under Mr Trump.
But he made clear the EU would be willing to act against the US whether it was related to a border tax proposal or the erection of other arbitrary trade barriers.
A defeat in a border tax case could open the door to some $385bn a year in trade retaliation against the US, according to experts of the Peterson Institute for International Economics.
And it's not gonna be the first time for the US partners to take retaliation actions.
In 1930, the Smoot-Hawley Tariff Act raised U.S. tariffs on over 2,000 imported goods.
The Act and following retaliatory tariffs by America's trading partners helped reduce American exports and imports by more than half during the Depression.
Mr Trump has yet to endorse the tax idea, but key advisers have praised it as a way of addressing what they see as the WTO's unfair treatment of business taxes.
The U.S. needs better trade deals and if that means walking away from the World Trade Organization to make that happen, President Donald Trump may do just that, former Trump trade advisor Dan DiMicco told CNBC.
Now, a lot of things are still question marks.
The corporate tax reform efforts are still at the early stages and the border proposal faces major political hurdles.
All eyes are still on what the Trump administration will finally say about tax and trade reforms.
CNBC's Qian Chen, reporting from Singapore.