President Donald Trump will unveil his tariff plan on Wednesday in the White House Rose Garden, Press Secretary Karoline Leavitt announced Monday. Leavitt said the tariffs would be “country-based” but provided no further details other than to say they are intended to “roll back the unfair trade practices that have been ripping off our country for decades.” She also said there would be no exemptions “at this time,” dashing hopes that the tariffs would be more modest than anticipated.
Although Trump has provided a few, sometimes contradictory clues about what might be coming – including possibly a flat tariff of 20% on all trading partners – White House economic adviser Kevin Hassett said this weekend that the final policy is still taking shape. “I can't give you any forward-looking guidance on what's going to happen this week,” Hassett told Fox News. “The president has got a heck of a lot of analysis before him, and he’s going to make the right choice, I’m sure.”
Trump, who is framing the upcoming event as “Liberation Day,” has already imposed new tariffs on Canada, Mexico and China, the country’s three largest trading partners, and has promised to impose another set of tariffs focused on specific sectors such as pharmaceuticals and semiconductors in the coming weeks.
No worries about car prices: The new tariff rules coming Wednesday will arrive amid growing concerns among manufacturers, investors, retailers and the American public about the potentially negative effects resulting from Trump’s rapidly escalating trade war – effects that include higher prices, the renewal of inflation, layoffs and the possibility of a stagflationary recession, in which both unemployment and prices rise.
Trump swatted at least one set of those concerns away on Sunday, telling NBC News that he is not concerned about the effect of tariffs on car prices, which are expected to be substantial, measuring in the thousands of dollars.
“I couldn’t care less if they raise prices, because people are going to start buying American-made cars,” Trump said. “I couldn’t care less, because if the prices on foreign cars go up, they’re going to buy American cars.”
White House aide Peter Navarro defended the tariffs this weekend, framing the taxes on vehicle imports as a great source of revenue for the federal government while claiming that overall, the tariffs will raise trillions of dollars. “First of all, we’re gonna raise about $100 billion with the auto tariffs alone,” Navarro told Fox News. “In addition, the other tariffs are gonna raise about $600 billion a year. About $6 trillion over a 10-year period.”
More broadly, Navarro promised that the tariffs would serve as a cure for all that ails America. “The message is tariffs are tax cuts. Tariffs are jobs. Tariffs are national security,” Navarro said. “Tariffs will make America great again.”
Broad resistance: All the talk of tariffs does not seem particularly popular with the American people. A new poll from CBS News/YouGov conducted over the weekend found that 55% of respondents think the Trump administration is putting too much of its focus on tariffs, with just 7% saying it was focusing too little and 38% saying the focus was just right. At the same time, 68% said it wasn’t paying enough attention to lowering prices – an issue tariffs are expected to exacerbate.
Experts say the tariffs – which are essentially a tax paid by American importers, with the cost typically passed onto consumers, though not necessarily in a simple or linear fashion – will fall largely on the American public. Analysts at the Yale Budget Lab estimate that tariffs on vehicle imports could raise roughly $600 billion over a decade. But that revenue, collected by the federal government as a tax, would come largely out of the pockets of American car buyers, who would see prices for a new car rise by an average of $6,400, using 2024 prices as a reference point.
Budget expert Jessica Riedl of the conservative Manhattan Institute told The Washington Post that the size of the potential tariffs has little precedent, and would amount to the largest increase in federal revenue since World War II. “We’ve never seen a president propose such a drastic tax increase at a time where there is no national emergency requiring it,” Riedl said. “You just do not hear numbers like $6 trillion over 10 years in legislation or executive orders.”
Speaking to investors last month, General Motors Chief Financial Officer Paul Jacobson said the tariffs will have an impact on more than just prices. “If [the tariffs] become permanent, then there’s a whole bunch of different things that you have to think about, in terms of where do you allocate plants, do you move plants, etc.,” he said, per USA Today. “Those are questions that just don’t have an answer today. As much as the market is pricing in a big impact of tariffs and lost profitability, think about a world where we’re spending billions in capital, and then it ends. We can’t be whipsawing the business back and forth.”
In addition to the tricky question of capital allocation, some experts worry that the Trump administration is relying on a simple, one-tool approach in a complicated world. Economist Julia Coranado of MacroPolicy Perspectives told Politico said the Trump administration seems to be ignoring the complexities of the U.S. and global economies, which don’t always do what policymakers intend and sometimes develop in ways that are hard to control. “The risk is that the economy is a dynamic system,” she said. “So once you actually start putting it into reverse, it keeps going. It’s not like you can control the macro economy with a little dial.”
Reflecting the growing unease about the tariffs, Goldman Sachs economist Jan Hatzius adjusted the bank’s outlook on the possibility of a recession this year, raising the odds to 35%. Hatzius said the change was based on a “lower growth baseline, the sharp recent deterioration in household and business confidence, and statements from White House officials indicating greater willingness to tolerate near-term economic weakness in pursuit of their policies.” The bank now forecasts another 5% drop in the S&P 500 this year, as well.
The White House’s Navarro, though, made it clear that he isn’t worried about any negative effects, and advised Americans to simply have faith. “Trust in Trump,” he said Sunday.