WASHINGTON (AP) — Following a week of fluctuating tariff impositions, President Donald Trump is evaluating his objectives for upcoming trade discussions with approximately 75 nations.
Trump is also strategizing his next actions concerning China. He increased tariffs on Chinese goods to 145% after China imposed retaliatory taxes of 84% on U.S. imports. While a 90-day tariff pause boosted the stock market on Wednesday, countries still face a 10% import tax, a baseline established after the higher rates announced on April 2.
Kevin Hassett, Director of the National Economic Council, stated that the administration has received “offers on the table from more than 15 countries.”
Hassett indicated that the subsequent step involves defining Trump’s desired outcomes from these negotiations.
“We are holding a meeting to present the President with a list of potential priorities,” Hassett explained. “I am confident he will introduce his own perspectives to steer the process.”
Here's an overview of the current tariff situation:
With a public debt of $28.9 trillion, the U.S. government remains reliant on its lenders. While Trump may challenge political adversaries and judicial figures, the bond market's reaction on Wednesday underscored its capacity to moderate his policies.
Leading up to Wednesday, the interest rate on a 10-year U.S. Treasury note was climbing, nearing 4.5%. This indicated challenges for the U.S. government in attracting debt buyers, as market participants speculated that Trump’s tariffs might have deterred foreign investors. Higher government interest rates could lead to increased mortgage and auto loan rates for consumers.
Trump initially dismissed investors as “yippy,” but later praised the bond market as “beautiful” following the tariff pause.
The S&P 500 index surged by 9.5% after the announcement. However, the market faced a downturn on Thursday. While Trump refrained from imposing a 20% tariff on EU goods, a 24% tariff on Japan, or a 25% tariff on South Korea, these nations still face a 10% import tax. Furthermore, increased tariffs against China have intensified the trade war between the world’s two largest economies.
Additionally, the trade conflict with China has escalated, with 25% tariffs remaining on imported automobiles, steel, and aluminum. Imports from Canada and Mexico also face tariffs up to 25%. Trump also intends to impose tariffs on pharmaceutical drugs, lumber, copper, and computer chips.
Because tariffs are taxes paid by importers, these costs typically transfer to consumers and businesses through higher prices and reduced economic growth. Yale University’s Budget Lab estimated that Trump’s current tariff policies could decrease a household’s average disposable income by $4,364.
Treasury Secretary Scott Bessent stated that trade agreements would be “bespoke,” rather than a collective pact among various countries. While Trump has voiced concerns and goals regarding tariffs, Canadian and European representatives have noted that the administration's specific demands have been unclear.
Trump aims to eliminate the $1.2 trillion trade deficit, indicating his desire for the U.S. to export more goods than it imports. He also hopes that tariff revenues will offset income tax cut plans and that the tariffs will revitalize factory jobs and increase worker wages.
Aides have indicated that Trump wants other nations to eliminate regulations, such as Europe’s value-added taxes, which he views as trade barriers. Commerce Secretary Howard Lutnick emphasized the objective of securing other nations' “respect” for Trump.
The Trump administration argues that China violates trade norms by subsidizing its manufacturers, stealing intellectual property, suppressing worker wages, and manipulating its currency.
The White House clarified that the 125% tariffs announced on Wednesday against China were, in fact, 145% after factoring in previous fentanyl tariffs.
Data from the Census Bureau shows that the U.S. had a $295 billion trade deficit with China last year. Because U.S. consumers and businesses are major consumers of Chinese goods, Bessent suggested that this gives the U.S. an advantage in inflicting economic pain through tariffs. China has been preparing for a potential trade war for years.
Cornell University economist Wendong Zhang suggested that while China’s GDP might be more impacted than the U.S., China is “likely to stand its ground” due to internal support and the ability to increase domestic consumption of goods no longer exported to the U.S.
Meanwhile, Trump must address voter concerns about higher prices resulting from trade wars.
“Many U.S. imports predominantly originate from China: smartphones (73%), laptops (78%), video game consoles (87%), toys (77%), and antibiotics for livestock production,” Zhang explained. “Sourcing from other countries will require time and increase costs.”