Trump aides prepare ‘universal’ tariff plans — with one key change

President-elect Donald Trump’s aides are exploring tariff plans that would be applied to every country but only cover critical imports, three people familiar with the matter said - a key shift from his plans during the 2024 presidential campaign.

If implemented, the emerging plans would pare back the most sweeping elements of Trump’s campaign plans but still would be likely to upend global trade and carry major consequences for the U.S. economy and consumers.

As a candidate, Trump called for “universal” tariffs of as high as 10 or 20 percent on everything imported into the United States. Many economists warned that such plans could cause price shocks, and many Republicans in Congress might have criticized them.

Two weeks before Trump takes office, his aides are still discussing plans to impose import duties on goods from every country, the people said. But rather than apply tariffs to all imports, the current discussions center on imposing them only on certain sectors deemed critical to national or economic security - a shift that would jettison a key aspect of Trump’s campaign pledge, at least for now, said the people, who cautioned that no decisions have been finalized and that planning remains in flux. The people spoke on the condition of anonymity to describe private conversations.

The potential change reflects a recognition that Trump’s initial plans - which would have been immediately noticeable in the price of food imports and cheap consumer electronics - could prove politically unpopular and disruptive. But consideration of universal tariffs of some kind still reflects the Trump team’s determination to implement measures that can’t be easily circumvented by having products shipped via a third country.

Exactly which imports or industries would face tariffs was not immediately clear. Preliminary discussions have largely focused on several key sectors that the Trump team wants to bring back to the United States, the people said. Those include the defense industrial supply chain (through tariffs on steel, iron, aluminum and copper); critical medical supplies (syringes, needles, vials and pharmaceutical materials); and energy production (batteries, rare earth minerals and even solar panels), two of the people said.

It’s also unclear how these plans intersect with Trump’s stated intent to impose 25 percent tariffs on Mexico and Canada and an additional 10 percent tariff on China unless they take measures to reduce migration and drug trafficking. Many business leaders view those measures as unlikely to ever take effect, but some people familiar with the matter said they could be imposed along with universal tariffs on key sectors.

The narrower list of initial tariffs may also partially reflect growing fears about the persistence of inflation in the coming year. The Federal Reserve in December signaled that officials expect just two interest rate cuts for this year, as price increases remain stickier than initially forecast.

Among those leading the internal planning is Vince Haley, a top Trump campaign aide slated to run the White House Domestic Policy Council; Scott Bessent, tapped to be Trump’s treasury secretary; and Howard Lutnick, the commerce secretary pick, the people said.

“The sector-based universal tariff is a little bit easier for everybody to stomach out the gate. The thought is if you’re going to do universal tariffs, why not at least start with these targeted measures?” one of the people said. “And it would still give CEOs a massive incentive to start making their products here.”

After this story was published on Monday morning, Trump criticized The Washington Post’s reporting in a post on his Truth Social site and said his tariff policy would not be pared back.

“The story in the Washington Post, quoting so-called anonymous sources, which don’t exist, incorrectly states that my tariff policy will be pared back. That is wrong,” Trump wrote. “The Washington Post knows it’s wrong. It’s just another example of Fake News.”

Even the revamped plans are strikingly aggressive. The Trump team’s plans would, if put into effect, amount to one of the biggest challenges in decades to the global trade order. Trump’s advisers view this effort as necessary to bring manufacturing jobs back to the U.S. economy, but it could invite retaliation from the rest of the world and drive prices up for consumers and businesses alike.

Before Trump’s Truth Social post, the transition team declined to comment on internal planning. Multiple people familiar with the discussions cautioned that Trump can change his mind quickly and that the tariff policies are not yet set.

“President Trump has promised tariff policies that protect the American manufacturers and working men and women from the unfair practices of foreign companies and foreign markets,” Brian Hughes, a spokesman for the Trump transition team, said in a statement. “As he did in his first term, he will implement economic and trade policies to make life affordable and more prosperous for our nation.”

Liberal and conservative critics say that even more-moderate versions of Trump’s campaign trade plans are still extreme, arguing that sweeping tariffs would drive up prices for U.S. consumers and manufacturers. Though Trump and protectionist allies say that these duties bolster domestic manufacturing by giving firms a financial incentive to invest here, economists of both parties say they can have the opposite effect by raising input costs.

“If you put tariffs on every country in the world, it’s not like we can import from Mars,” said Kimberly Clausing, who served as a top economist in President Joe Biden’s Treasury Department and is now at UCLA and the Peterson Institute for International Economics, a Washington-based think tank. Clausing said that a majority of U.S. imports are for intermediate goods in firms’ supply chains, not for finished products. “So we’d be making it much more expensive for a U.S. firm to compete with anyone else in the world, because our firms would have to pay much more for imports.”

The emerging tariff plans bring into focus what is likely to be a key priority of the new administration.

During his first term, Trump imposed tariffs on more than $360 billion worth of goods from China, particularly steel and aluminum. His trade threats were largely focused on Beijing, but they rattled global trade and sparked major tensions with America’s geopolitical allies.

Trump’s tariffs on China were followed by a boom in imports to the United States from countries such as Vietnam, as manufacturers rerouted goods to circumvent the duty. Both Biden and Trump advisers have also expressed concerns about the potential for China to use Mexico as a back door to U.S. markets.

Mexico now accounts for more than 87 percent of certain U.S. steel imports, with the total level nearly 500 percent over its historic baseline, according to data compiled by the Coalition for a Prosperous America, a group that supports trade restrictions. The surge in Mexican steel into the United States has coincided with the closure of some U.S. factories, such as the Zekelman Industries plants in Chicago and California.

Charles Benoit, a trade attorney at the Coalition for a Prosperous America, said the U.S. government already collects sector-specific information on imports, which would make it relatively easy to add tariffs.

“Twenty percent across-the-board tariffs are great for revenue, but if they’re looking to tailor it a bit that’s easy to do in the tariff schedule,” Benoit said. “There’s no additional compliance cost, no rulemaking - so it’s elegant.”

Trump in recent days has publicly reiterated his affinity for tariffs, which during the campaign he called “the most beautiful word in the dictionary.” On Wednesday, he posted on his social media platform Truth Social: “The Tariffs, and Tariffs alone, created this vast wealth for our Country … Tariffs will pay off our debt and, MAKE AMERICA WEALTHY AGAIN!”