Trump is holding off on tariffs, but paving the way for future trade moves

President Trump will stop short of imposing tariffs on foreign products on Monday, but will issue an executive order that directs federal agencies to begin studying a broad list of trade issues that could result in tariffs on goods from China, Canada, Mexico and other countries. next month.

The decision suggests that Mr. Trump is taking a more proactive approach to fulfilling a key campaign promise to use the tariffs to restore America’s trade relationship. It will also delay – at least for now – the fight that has arisen with foreign governments, which have promised to respond to Mr Trump’s taxes on his personal income.

The topic that will be led by Mr. Trump’s authorities to investigate the executive order on Monday will be extensive, including trade deficits and trade agreements signed with China, Canada and Mexico. That could raise the president’s ability to impose tariffs on multiple targets for a variety of reasons, potentially disrupting international supply chains and sparking a global trade war in the coming weeks and months.

The executive order will direct federal agencies to investigate unfair trade and currency practices and assess whether foreign governments have followed the terms of two trade agreements signed by Mr. Trump in his first term. It also requires the government to evaluate the feasibility of creating an “External Revenue Service” to collect fees and duties.

Mr Trump is also ordering a review of tariffs imposed by the US on national security grounds, as well as the use of special trade exemptions, known as de minimis, which allow low-value goods to enter the country free of charge. United States. . That loophole has allowed many Chinese goods to escape the tariffs Mr. Trump slapped on China during his first term. Details of the executive order were reported by The Wall Street Journal.

While Mr. Trump has decided to suspend the tariffs for now, his advisers say they remain more convinced than ever that they can be used to great advantage.

The president and his advisers have favored a mix of policies, including international tariffs on foreign products, higher tariffs on China and separate measures that could loosen trade ties. to Mexico and Canada by imposing taxes on those countries as well, the common man. with the said plans.

In his inaugural address on Monday, Mr. Trump said he would “immediately begin reforming our trading system to protect American workers and families.”

There will be “a lot of money going into our treasury” because of the fee, he said. “The American dream will soon return and prosper like never before.”

Mr. praised the price. Trump because of their ability to help American companies, raise revenue to help pay the taxes he hopes to do and generally be a source of negotiation with foreign countries.

Although trade administration is technically the domain of Congress, various trade laws have given the president significant authority to enact tariffs. The president can use them to protect US national security, respond to unfair trade practices and counter various types of international emergencies.

Mr. Trump and his advisers continue to debate the best method to use to release the tariffs, but they believe they have the legal authority to use one of them, people familiar with the debate said.

Some U.S. manufacturers are guaranteeing the wages Mr. Trump imposed during his first term – and kept by President Joseph R. Biden Jr. – by helping his company survive in the face of intense competition from countries like China. But many other economists and businesses argue that the tariffs could cause economic damage, as they raise the price of imported goods and prompt retaliation from other governments that could hurt US exports.

Mr. Trump’s executive order will keep foreign governments in check for weeks, as they try to establish closer ties with his administration and persuade the president not to target them.

Canadian officials have drawn up a list of US goods they plan to retaliate if Mr Trump imposes tariffs, including Florida orange juice, Tennessee whiskey and Kentucky peanut butter. Mexico has also threatened to impose tariffs on US exports, as have the European Union and other governments.

During his first term, Mr. Trump shook up the country’s global trade relations by imposing tariffs on foreign washing machines, solar panels, metals and other products. from China. These actions are nearly double the average rate applied to imported goods, although US tariffs remain below international standards.

Economists have expressed concern about Mr. Trump’s plans to extend those taxes. They say that, while the tariffs could help some protected U.S. industries, they have other effects on the economy, including raising costs for households and businesses that rely on imported products. outside.

Lydia Cox, an economist at the University of Wisconsin-Madison, described wages as a “fuzzy tool” in an online forum hosted by the Harvard Kennedy School last week.

There are potential benefits for industry protected by tariffs, he said, “but it causes a lot of damage down the road.”