Trump Aides Prepare ‘Universal’ Tariff Plans with Major Adjustment
Trump Aides Prepare ‘Universal’ Tariff Plans with Major Adjustment
According to three individuals with knowledge of the situation, President-elect Donald Trump’s advisers are exploring tariff proposals that would apply to all countries, but would only cover critical imports. This represents a significant departure from his intentions during the 2024 presidential campaign.Even though they would scale back the most expansive aspects of Trump’s campaign plans, if implemented, the emerging plans would likely disrupt global trade and have significant repercussions for the U.S. economy and consumers.
While running for president, Trump advocated for “universal” tariffs on all imported goods that could reach as high as 10 or 20 percent. Many economists cautioned that such plans could result in price disruptions, and numerous Republicans in Congress may have criticized them.According to the sources, Trump’s advisers are still planning to implement import tariffs on products from all countries two weeks before his inauguration. However, the current discussions focus on imposing tariffs on specific sectors considered critical to national or economic security rather than all imports. According to the people, this shift would, at least for the time being, negate a crucial component of Trump’s campaign pledge. They also cautioned that they have not made any decisions and are still finalizing the planning. The individuals disclosed their private conversations under the assumption of anonymity.
Trump’s initial plans, evident in the price of food imports and cheap consumer electronics, could have been politically unpopular and disruptive. The potential adjustment reflects this recognition. However, the Trump administration’s intention to implement measures that are difficult to bypass by shipping products through a third country is still evident in the contemplation of universal tariffs of some form.
It was not immediately apparent which industries or imports would be subject to tariffs. According to the individuals, the Trump team has prioritized several critical sectors that it intends to reinstate in the United States during the preliminary discussions. Those include the defense industrial supply chain (through tariffs on steel, iron, aluminum, and copper), critical medical supplies (syringes, needles, vials, and pharmaceutical materials), and energy production (batteries, rare earth minerals, and solar panels), according to two of the individuals.
The connection between these plans and Trump’s stated intention to impose 25% tariffs on Mexico, Canada, and China, unless they implement measures to reduce drug trafficking and migration, remains unclear. Some knowledgeable individuals have suggested that those measures could be implemented in conjunction with universal tariffs on critical sectors, despite many business leaders considering them highly unlikely to ever be implemented.
The reduction in the number of initial tariffs may also indicate increasing concerns regarding inflation’s durability in the upcoming year. In December, the Federal Reserve indicated that officials anticipate only two interest rate reductions this year, as price increases have proven more persistent than anticipated.
According to the sources, Vince Haley, a senior Trump campaign adviser who is expected to assume the role of White House Domestic Policy Council director; Scott Bessent, who is likely to serve as Trump’s treasury secretary; and Howard Lutnick, the commerce secretary nominee, are among the individuals overseeing the internal planning.
“The sector-based universal tariff is initially more palatable for all individuals.” “The idea is that if you are going to implement universal tariffs, why not begin with these targeted measures?” one of the individuals stated. “It would also provide CEOs with a significant incentive to start manufacturing their products in this country.”
Following the publication of this story, Trump expressed his dissatisfaction with The Washington Post’s reporting on his Truth Social website on Monday morning. Additionally, he declared that his tariff policy would not undergo any reduction.
“The Washington Post’s article, which relies on anonymous sources who do not exist, inaccurately asserts that I will reduce my tariff policy.” “That is incorrect,” Trump wrote. “The Washington Post is aware that its position is incorrect.” It is yet another instance of “fake news.”The revised plans are still exceedingly aggressive. If implemented, the Trump administration’s proposals would constitute one of the most significant obstacles to the global trade order in decades. Trump’s advisers regard this endeavor as essential for restoring manufacturing employment in the United States. However, it may result in retaliation from other nations and increased consumer and business prices.
The transition team declined to comment on internal planning before Trump’s Truth Social post. Several individuals familiar with the discussions have expressed concern that Trump might change his mind and that the tariff policies remain unestablished.“Brian Hughes, a spokesperson for the Trump transition team, stated in a statement that President Trump has pledged tariff policies to safeguard American manufacturers and working men and women from the unjust practices of foreign companies and foreign markets.” “He will continue to implement economic and trade policies to create a more prosperous and affordable life for our nation, as he did during his first term.”
Liberal and conservative critics contend that even more moderate versions of Trump’s campaign trade plans are still radical, arguing that sweeping tariffs would increase prices for U.S. consumers and manufacturers. Although Trump and his protectionist allies assert that these duties promote domestic manufacturing by providing firms with a financial incentive to invest in the United States, economists from both political parties contend they can have the opposite impact by increasing input costs.
Kimberly Clausing, a former senior economist in President Joe Biden’s Treasury Department and current affiliate of the Peterson Institute for International Economics, a Washington-based think tank, and UCLA, asserted that imposing tariffs on every country in the world would not allow us to import from Mars. Clausing stated that the majority of U.S. imports are for intermediate commodities in firms’ supply chains rather than for finished products. “Therefore, our firms would be required to pay significantly more for imports, rendering it significantly more expensive for a U.S. firm to compete with any international entity.”
The upcoming tariff proposals highlight a key goal of the incoming administration.
Trump implemented tariffs on over $360 billion in Chinese products during his inaugural term, particularly emphasizing steel and aluminum. He primarily directed his trade threats at Beijing, causing significant tensions with America’s geopolitical allies and disrupting global trade.Following Trump’s tariffs on China, there was a surge in imports from countries like Vietnam to the United States as manufacturers redirected products to avoid the duty. Both Biden and Trump advisers have expressed concerns regarding China’s potential to exploit Mexico as a backdoor to U.S. markets.
According to data compiled by the Coalition for a Prosperous America, a group that advocates for trade restrictions, Mexico is responsible for over 87 percent of specific U.S. steel imports, with the total level exceeding its historical baseline by nearly 500 percent. The cessation of specific U.S. factories, including the Zekelman Industries plants in Chicago and California, has coincided with the increase in Mexican steel entering the United States.
Charles Benoit, a trade attorney at the Coalition for a Prosperous America, stated that the U.S. government currently accumulates sector-specific information on imports, which would make imposing tariffs relatively straightforward.
Benoit said, “Uniform tariffs of twenty percent increase revenue.” However, customization of the tariff schedule is straightforward. “No additional compliance cost or rulemaking makes it elegant.” Trump has recently publicly reiterated his admiration for tariffs, which he referred to as “the most beautiful word in the dictionary” during the campaign. On Wednesday, he posted on his social media platform, Truth Social: “The tariffs, and tariffs alone, created this vast wealth for our country…” Tariffs will satisfy our obligations and restore America’s prosperity.
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