Trump urges advisers to back universal tariff as trade war escalates

President Donald Trump is doubling down on tariffs, calling on his senior advisers to act more boldly as they make last-minute preparations for April 2, his “Liberation Day.”

According to several people familiar with internal White House discussions, Trump wants to impose huge import tariffs that could affect trillions of dollars of international trade.

Trump doubles down on tariffs despite warnings from economists and Wall Street

Trump consistently disregards economic experts and has ignored pushback from congressional Republicans and Wall Street. 

He believes that aggressive tariffs are the best way to restore American manufacturing and boost federal coffers. His administration has already imposed tariffs on major industries.

The move is a huge escalation of Trump’s under-the-radar trade war, which will likely affect U.S. economic policy for years.

Advisers to the president are still deciding the exact nature of the tariffs, weighing their potential economic costs against Trump’s vision of a more self-sufficient American economy.

Trump’s campaign to raise tariffs has already shaken financial markets. Earlier this week, his administration declared a 25% tariff on all automobile imports, panicking investors and plunging stock prices.

Now, he is considering expanding tariffs similar to those of other parts of the economy, including pharmaceuticals and lumber.

The market response has been immediate and negative. The three big U.S. stock indices dropped last Friday, and analysts pointed to the uncertainty of Trump’s widening trade war as a key driving force.

Economists have cautioned that these retaliatory tariffs will discourage economic growth, inflate prices, and even lead the country into recession.

Even Republican lawmakers traditionally bound by free-market orthodoxy have grown nervous.

Stephen Moore, a longtime Trump ally and co-founder of the Committee to Unleash Prosperity, said the emphasis on tariffs was eclipsing debate about tax policy. He said imposing tariffs was not the answer to saving manufacturing jobs.

Trump pushes tariffs as a win-win strategy for the U.S

Still, Trump remains confident that tariffs will bring economic benefits. He thinks they will compel U.S. trading partners to reduce their tariffs and encourage American firms to repatriate manufacturing.

People close to Trump say he regrets listening to advisers who talked him out of higher tariffs during his first term. Now, he is determined to act on those instincts.

He has revived the debate over a single, across-the-board import duty that would simplify the tariff system and thwart exemptions that could dilute its power.

Tariffs are more than just a negotiating tool for Trump; they are a centrepiece​ of his economic policy. He has openly touted import taxes, which he called the “most beautiful” word in the dictionary.

He even called for the declaration of April 2 as a day of national celebration, as he believes tariffs will change the economy.

Among those allies was former White House strategist Steve Bannon, who pitched the idea. Rather than celebrating Trump’s birthday, Bannon said April 2 should be made “Liberation Day,” a national day of mourning for the lost jobs, skills, and trade he claimed had returned to America and its people.

Trump has not been shy about levying tariffs, a position that has divided Republicans. While many in the party support using tariffs as a short-term negotiating tactic, Trump seems more enthusiastic about permanent trade obstacles that would remap the American economy.

Trump’s former Commerce Secretary Wilbur Ross said, “Any number of options are still under consideration.” He said officials were looking at every option and working hard to make the idea of a reciprocal tariff popular with the American public and functional.

However, some Republican lawmakers are uneasy about the long-term consequences. They worry that permanently adding tariffs could upend supply chains, raise consumer prices, and undermine critical industries that depend on worldwide commerce.

Sen. Ron Johnson (R-Wisconsin) acknowledged the risks and expressed a sense of unease. But he said that overall, many were still inclined to give the president the benefit of the doubt, given his past accomplishments.

Sen. Mike Rounds (R-South Dakota) offered a slightly separate view, saying that he didn’t see tariffs as a means of adding to the bottom line but as a means of returning jobs to the U.S. economy.

Tariffs disrupt farming and manufacturing industries

The agricultural sector is closely monitoring Trump’s next moves. North Dakota farmers, for instance, were mostly insulated from earlier rounds of tariffs but feared the consequences of any further actions.

During Trump’s first term, the administration provided $23 billion to farmers affected by the trade war with China. And some lawmakers have begun consultations with the Department of Agriculture on providing similar aid, should it be necessary.

Manufacturers are nervous, too. Some believe tariffs could give them an edge by making foreign competition less affordable. In contrast, others worry they will need to raise prices or lay off workers because of higher import costs.

The battle over Trump’s trade policy indicates a deep split in his political base. Some right-of-centre economists claim tariffs can be used to pressure other countries to drop trade barriers. Others have come to see them as a permanent solution sufficient to defend American industry.

Nick Iacovella, the Coalition for a Prosperous America vice president, advocates permanent tariffs. He justifies using tariffs as a temporary bargaining chip, which contradicts Trump’s vision of reviving American manufacturing. His group has proposed a broad 18% tariff on virtually all products.

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