Trump Calls For New Tariffs on Friends and Foes Alike

Reuters
By Yuval Rosenberg and Michael Rainey

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Trump Calls For New Tariffs on Friends and Foes Alike

President Donald Trump signed an official memorandum Thursday ordering federal agencies to develop a plan to combat "unfair" economic practices among U.S. trading partners that raise barriers to U.S. exports.

Trump had previously indicated that he would roll out reciprocal tariffs against trading partners this week as part of his effort to reduce the U.S. trade deficit, but today's memorandum calls for further study and analysis of the issue. It also makes clear that the administration is targeting a range of economic practices among trading partners not limited to tariffs, including potential barriers such as domestic subsidies, regulations and consumption taxes.

Commerce Secretary nominee Howard Lutnick said the analysis should be completed by April 1, clearing the way for Trump to impose new punitive tariffs immediately thereafter.

A "fair and reciprocal" plan: In a fact sheet accompanying the memorandum, the White House laid out its case for a new trade paradigm.

"We will no longer tolerate unfair trade practices," the White House said. "The United States is one of the most open economies in the world, yet our trading partners keep their markets closed to our exports. This lack of reciprocity is unfair and contributes to our large and persistent annual trade deficit."

As expected, one focus of the effort is on tariffs imposed by trade partners that are higher than the tariffs imposed by the U.S. Brazil, for example, imposes an 18% tariff on ethanol imports from the U.S., but the U.S. tariff on the same product from Brazil is just 2.5%, the White House said. Reciprocal tariffs would aim to equalize those levies.

Other economic practices could come under the spotlight as well. For example, the administration says digital service taxes in Europe and Canada cost U.S. firms hundreds of millions of dollars, while the U.S. has no such tax.

More broadly, the memo suggests that consumption taxes, including the value-added taxes that are used by counties all over the world, could be seen as unfair trade barriers and thus targets for new tariffs.

White House officials told The Wall Street Journal that the analysis Trump ordered Thursday will calculate the value of all barriers imposed by trade partners, laying the foundation for new tariffs that reflect the estimated losses for U.S. firms. That could mean the flat tariffs on trading partners Trump has discussed in the past are less likely to be imposed, but at the same time, the new tariff regime could be more complex than originally anticipated.

Inflation and debt: Many economists believe that additional tariffs in whatever form would likely be inflationary, since U.S. companies typically raise prices to cover some or all of the increased costs created by import taxes, which the companies themselves are required to pay.

Former Federal Reserve Vice Chair Alan S. Blinder told The New York Times that tariffs, when combined with mass deportations, another key Trump policy, could deliver "stagflationary shocks" to the economy. "They're inflationary, and they're anti-growth," he said.

Economists within the Trump administration dismiss those concerns, arguing that their overall economic program includes disinflationary components such as higher energy production and reduced government spending. "These tariffs aren't happening in a vacuum," Trump trade adviser Peter Navarro told the Times.

Asked about the risk of tariffs raising prices domestically, Trump admitted to reporters gathered in the Oval Office that "prices could go up somewhat short term," but would eventually go down as domestic production ramps up. "I think what's going to go up is jobs are going to go up," he said. "Long term, it's going to make our country a fortune."

Pressed on the issue, Trump disagreed that Americans would experience any economic pain because of the tariffs. "We'll see what happens," he said. "Nobody really knows what is going to happen."

Trump said the burgeoning tariff proposal is a key part of his plan to increase prosperity broadly and has been embraced by the American CEOs he has spoken to. "They say, this is the thing that's going to make our country really prosperous again, and this is going to be what pays down the $36 trillion in debt and all the other things."

House GOP Leaders Strike a Deal With Hardliners on Budget Plan

The House Budget Committee was poised to advance a Republican budget resolution Thursday after GOP leaders struck a deal with Freedom Caucus hardliners to amend the plan and allow of steeper spending cuts in exchange for bigger tax cuts. The deal reportedly would require committees to reach $2 trillion in savings over 10 years or else dial back on the $4.5 trillion in room for deficit-increasing tax cuts over 10 years. The agreement also allows more than $4.5 trillion in tax cuts if committees are able to deliver more than $2 trillion in savings.

House Freedom Caucus Chair Andy Harris told reporters that his group would vote for the bill with the agreed-upon amendment. He said his caucus had pushed to offset the entire cost of the package. "We want to make it deficit neutral. We think that with our amendment it ensures deficit neutrality, and that's all we care about," Harris said, per Roll Call.

Budget experts warned this week that the House plan as originally outlined relied on gimmicks and would increase deficits.

The Senate Budget Committee led by Sen. Lindsey Graham advanced its own budget resolution on Wednesday. That plan leaves aside tax changes for a second reconciliation bill. "Senate GOP leaders are leaning toward moving Lindsey Graham's budget resolution to the floor next week, setting up a showdown with both Democrats and House Republicans," Punchbowl News reports.

The bottom line: The House plan looks set to take a significant step forward, but the narrow GOP majority in the chamber still doesn't guarantee that the blueprint will sail through in a floor vote. Republican Rep. Victoria Spartz of Indiana has reportedly already said she will oppose it, and some more moderate members may have concerns about the levels of cuts to Medicaid, food stamps or other programs.

Number of the Day: 77,000

More than 77,000 federal workers accepted the Trump administration's buyout offer, White House press secretary Karoline Leavitt said Thursday. The offer allowed most workers to resign with the promise of getting paid through September.

The White House said this week that the federal workforce has more than 2.4 million employees, excluding active-duty military and Postal Service employees. That means that just over 3% of federal workers accepted the buyout offer, short of the administration's reported target of 5% to 10%.

The White House closed the offer Wednesday after a federal judge lifted a pause that he had placed on the program in response to a lawsuit by federal workers' unions challenging the legality of the offer. The judge ruled that the unions lack standing to bring the suit and the court doesn't have jurisdiction.

Leavitt said that the buyout program would save the government hundreds of millions of dollars. "We are saving the American taxpayers money at the end of the day, and this is going to make our government more efficient," she told NewsNation.

The federal government has reportedly also started sweeping layoffs of federal workers after Trump on Tuesday signed an executive order directing agency heads to "promptly undertake preparations to initiate large-scale reductions in force." The order also requires agencies to consult with Elon Musk's DOGE team on hiring plans/

"White House officials are eyeing cuts to agency budgets of between 30 and 40 percent, on average, across the government," The Washington Post reports, with reductions centered on staff cuts.

Quotes of the Day

"We do need to delete entire agencies, as opposed to leave part of them behind. Because if you leave part of them behind - it's easy, it's kind of like leaving a weed. If you don't remove the roots of the weed, then it's easy for the weed to grow back. But if you remove the roots of the weed, it doesn't stop weeds from ever growing back but it makes it harder. So we have to really delete entire agencies, many of them."

− Elon Musk, in a video interview at the World Governments Summit in Dubai, when asked if there's a way to ensure that the changes he's making won't be reversed by a future administration.

"Congress, not the executive branch, has the power of the purse, meaning the power to control federal spending. It is right there, as clear as day in Article I, Section 9, Clause 7: 'No money shall be drawn from the Treasury, but in consequence of appropriations made by law.' ... Meanwhile, the Department of Government Efficiency is clearly another attempt by wealthy donors like Mr. Musk to artificially insert their policy preferences into the governing process. He is trying to disguise this self-serving crusade as a blue-ribbon commission, but it has no legal authority and aims to substitute the will of a rich few for the will of the people. This is par for the course for Republicans and their Project 2025 agenda, which seeks to erode the Constitution at every turn and give the president unilateral authority."

− Rep. Rosa De Lauro, the top Democrat on the House Appropriations Committee, in a guest essay for The New York Times on Wednesday.

Robert F. Kennedy Jr. Sworn In as Health and Human Services Secretary

Robert F. Kennedy Jr. was sworn in as head of the Department of Health and Human Services Thursday after the Senate confirmed him earlier in the day, delivering another win for President Donald Trump despite intense opposition to Kennedy rooted in his long history of anti-vaccine activism and controversial public health positions. During his confirmation hearings, Kennedy also raised concerns about his understanding of the Medicare and Medicaid programs he will now oversee.

Kennedy has waged a campaign to "Make America Healthy Again," including a focus on chronic illness and improved food safety and nutrition. He'll now lead a vast healthcare bureaucracy, including the Centers for Disease Control and Prevention (CDC), the Centers for Medicare & Medicaid Services (CMS), the Food and Drug Administration (FDA) and the National Institutes of Health (NIH).

As with yesterday's vote to confirm Tulsi Gabbard as director of national intelligence, Thursday's vote on Kennedy's nomination was 52-48, largely along party lines, with Sen. Mitch McConnell again the lone Republican to join with Democrats in voting against the nominee. McConnell has now voted against three of Trump's Cabinet picks. On Thursday, he issued a scathing statement saying that Kennedy's record of "trafficking in dangerous conspiracy theories and eroding trust in public health institutions" does not qualify him to lead efforts to make America healthier.

"I'm a survivor of childhood polio. In my lifetime, I've watched vaccines save millions of lives from devastating diseases across America and around the world. I will not condone the re-litigation of proven cures, and neither will millions of Americans who credit their survival and quality of life to scientific miracles," McConnell said. "Mr. Kennedy failed to prove he is the best possible person to lead America's largest health agency. As he takes office, I sincerely hope Mr. Kennedy will choose not to sow further doubt and division but to restore trust in our public health institutions."

During his confirmation hearings, Kennedy denied being anti-vaccine and said he is "pro-safety."

An analysis published last year by the Centers for Disease Control and Prevention said that routine childhood vaccinations will prevent more than 500 million illnesses and more than 1.1 million deaths, saving $2.7 trillion, among children born from 1994 through 2023.

Trump racking up wins: The Senate also confirmed conservative lawyer Brooke Rollins as secretary of agriculture in a 72-28 vote, bringing the total number of Cabinet members confirmed to 16. The Senate also voted to advance Howard Lutnick's nomination for commerce secretary. And the Senate Judiciary Committee advanced the nomination of Kash Patel to lead the FBI in a 12-10 party-line vote. Patel's nomination will be taken up by the full Senate as early as next week.

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