Since President Donald Trump won the election in November, businesses worldwide have been preparing for potential higher tariffs, a key promise made by the president. Despite being over a week into his presidency, Trump has not yet implemented any new tariffs. However, this could change by 11:59 p.m. ET on Saturday, the deadline set by Trump for imposing 25% tariffs on all Mexican and Canadian goods and a possible 10% tariff on all Chinese goods.
Trump's rationale for these tariffs is to penalize these nations for allegedly aiding illegal immigration into the US and supplying fentanyl. While Trump has emphasized his seriousness regarding these tariff threats, former Commerce Secretary Wilbur Ross suggests that blanket tariffs may be overstated. Ross believes that there will likely be exclusions for goods that are not produced domestically, making tariffs unnecessary.
Ross, who served throughout Trump's first term, advocated for exclusions when advising on tariff policies. Treasury Secretary Scott Bessent also supports a gradual approach with exclusions for specific goods. However, Howard Lutnick, Trump's nominee for the Commerce Department, favors a blanket tariff strategy. Ross highlights the challenges faced when implementing exclusions, citing the 11,000 exclusion requests received when steel tariffs were imposed in 2018.
Many of these requests were denied, leading to complexities in managing exclusions. Ross describes the process as creating a 'whack-a-mole' situation, where addressing exclusions for certain countries or goods becomes challenging.
