US President Donald Trump hinted at possible exemptions to his recently imposed 10% tariff on most US trading partners, asserting that the tariff rate is “pretty close” to a baseline for nations seeking trade negotiations. Speaking to reporters aboard Air Force One en route to Florida, Trump suggested that there could be exceptions for certain countries for “obvious reasons,” although he did not specify what these reasons might entail or indicate any immediate shift in tariff policy.
The President’s remarks come amid a turbulent week for global financial markets, which reacted sharply to the initial announcement and subsequent delay of higher tariffs on numerous nations. Trump’s administration had hastily enacted higher tariffs, only to backtrack hours later in response to concerns over potential economic repercussions.
Despite the tumultuous market response, Trump remains steadfast in his strategy to leverage tariffs as a tool to bolster domestic manufacturing and increase federal revenue. Notably, while China faces a substantial 145% tariff rate, Trump intends to maintain the 10% baseline for most other countries, prompting a rush among foreign governments to secure favorable trade deals with the US.
In light of recent market volatility, which saw significant fluctuations in stock and bond markets, Trump expressed confidence in the resilience of the US economy, remarking, “I think the markets were solid today. I think people are seeing we are in great shape.” He reiterated his belief in the strength of the US dollar as the global currency of choice, dismissing concerns over its stability.
Regarding the ongoing trade dispute with China, Trump struck a hopeful note, predicting that “something positive is going to come” from negotiations with Chinese President Xi Jinping. He praised President Xi as “a very good leader, a very smart leader,” suggesting optimism for potential breakthroughs in resolving the protracted trade tensions between the world’s two largest economies.
Despite the temporary relief offered to other trading partners, the imposition of high tariffs on China is expected to elevate the average US duty rate to historic levels, impacting an estimated $690 billion in bilateral trade. Both Washington and Beijing have escalated tariffs on each other’s goods, underscoring the intensity of their economic standoff while leaving room for further negotiations.
In conclusion, while uncertainties persist amidst evolving tariff policies and global economic dynamics, Trump’s administration continues to navigate a delicate balance between protectionist measures and international trade relations, with significant implications for global markets and economies alike.–BLOOMBERG
