- President surprised many by not imposing tariffs right away
- His team is still debating basic questions like who to charge
President Donald Trump’s tariff plans are the great unknown in the global economy right now — and it’s partly because his team is still trying to figure out what to do. Tariffs were so central to Trump’s victorious election campaign that trade experts, and even some of his allies, were surprised when they went missing in action during his first days back in the White House. The president threatened new duties on Mexico, Canada and China – but he didn’t actually impose any, even as he was taking steps to speed energy production, curb immigration and reshape the federal workforce. Instead, Trump’s Day One trade memo instructed his team to study unfair trade practices globally, and investigate whether Beijing had complied with a 2020 deal. A sharp turn to protectionism in the US has the potential to upend economies and markets everywhere, so governments, businesses and investors around the world are desperate for a roadmap. Federal Reserve Chair Jerome Powell captured the uncertainty at his press conference on Wednesday, saying that the range of possible tariff impacts is “very, very wide.” But Trump’s slower-than-expected rollout stems from unresolved questions within the new administration, according to people briefed on the internal deliberations. The Trump team is still debating the fundamentals of tariff policy — like whether the taxes should be imposed across the board or targeted at specific countries and industries, and whether they should be reciprocal. Along with a lack of consensus among the administration’s economic team, they’re also short key staff. Most nominees are still awaiting Senate confirmation. Howard Lutnick, Trump’s pick to be Commerce secretary, and Jamieson Greer, the nominee to be trade representative, may not be confirmed for several weeks, and there are few political appointees at either agency. Treasury Secretary Scott Bessent has told allies that his number one priority in 2025 is passing a sweeping tax package. All of this means that tariff discussions are currently taking place among a small circle of advisers already at the White House, including Deputy Chief of Staff Stephen Miller, trade adviser Peter Navarro and National Economic Council Director Kevin Hassett, the people said.
On the campaign trail, Trump said he’d use tariffs to raise revenue, slash America’s trade deficit and bring industry back to the country. He promised a 10% to 20% charge on all imported goods, as well as tariffs as high as 60% for China. Since his November election win, he’s also threatened a 25% tax on products from Canada and Mexico, the two biggest US trade partners. On the universal tariffs and the ones slated for China, the Trump team is not close at all to making a decision, according to people briefed on the discussions. For Canada and Mexico, Trump set a deadline of Feb. 1, and trade experts anticipate that he’ll announce the promised tariffs around that date. But because they’re unlikely to take effect for up to two weeks after an announcement, both countries would theoretically have time to negotiate with the White House, cave to Trump’s demands — he wants tighter curbs on the flow of people and drugs across borders –- and avoid the tariffs altogether.It’s a key question about Trump’s trade plans more broadly: How many of the tariffs he floats are really intended as bargaining chips to help achieve other goals?
