By President-elect Donald Trump is reportedly reconsidering his approach to tariffs, potentially opting for a more targeted strategy that would apply duties to a select range of goods and services rather than imposing them universally across all nations, according to a report by the Washington Post.
This shift suggests a softening of his earlier stance, though even a narrowed focus on tariffs could still bring about major changes to global commerce, according to sources cited in the report.
Trump disputes the report on social media
However, Trump disputed the report on Truth Social, writing:
The story in the Washington Post, quoting so-called anonymous sources, which don’t exist, incorrectly states that my tariff policy will be pared back. That is wrong.
This denial introduces further uncertainty into the discussion and highlights the potential for evolving policy approaches from the incoming administration.
Concerns about inflation fuel policy reconsideration
This potential change in strategy emerges amid growing concerns that Trump’s initial proposal to impose universal tariffs of 10% or 20%, specifically targeting China and Mexico, could trigger another surge in inflation.
Although tariffs imposed during Trump’s first term had little broad impact on prices, economists are now wary that current conditions may differ.
They fear that aggressive tariffs could have a more significant impact this time around.
Focus on industrial metals, medical supplies, and energy
According to the Post report, while it remains unclear which sectors would ultimately be affected, initial discussions have centered on a variety of industrial metals, medical supplies, and energy.
This targeted approach suggests a strategy aimed at protecting specific domestic industries and supply chains, rather than a more broad-based approach.
Trade deficit adds to economic pressures
The US is currently running a $74 billion monthly trade deficit, a figure that has ballooned during the Covid-19 pandemic.
This substantial trade deficit adds to the economic pressures facing the incoming administration, and further highlights the complexities surrounding tariff policy and its potential impact on the national economy.
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