Trump says the 10% tariff is more or less the minimum, though there could be some flexibility
The U.S. President indicated that his 10% tariff functions as the foundational rate for trade agreements but acknowledged the possibility of exceptions. The market experienced one week of instability due to his changing China trade war policies before this announcement was made. Trump has kept a 10% Trump tariff rate for most nations but has set China's tariff at 145%. Trump remained optimistic about the United States despite existing fears of a potential economic downturn.
President Donald Trump declared on Friday that his 10% tariff functions as a base rate and acknowledged potential exceptions. He expressed optimism about the potential positive developments that would emerge from negotiations with China.
Trump announced to reporters from Air Force One heading to Florida that the 10% tariff serves as a minimum rate although some exceptions could occur for obvious reasons. He didn’t provide details about the "obvious reasons" and made no indication of changes to his overall tariff policy.
His comments came at the end of a turbulent week in the equity and bond markets and created more uncertainty for nations, investors, and businesses who are already dealing with his shifting trade policies. Trump declared new extensive tariffs on multiple countries earlier this week but postponed the decision several hours afterwards when financial markets experienced sharp reactions over concerns about potential negative impacts on the U.S. economy.
The U.S. President has established a 145% tariff specifically targeting Xi Jinping China's economy while maintaining a general 10% tariff rate for other countries which leads foreign governments to actively seek beneficial agreements with the United States.
On Friday, markets rallied. The S&P 500 gained 1.8% which marked its most successful week since 2023 after a Federal Reserve official indicated potential market stabilization measures if needed. Yields on U.S. 10-year Treasuries pulled back from their peak levels while recording their most substantial weekly increase in over twenty years.
Recent market volatility continues to persist while fears mount that Trump’s tariffs intended to stimulate U.S. manufacturing and increase Federal Reserve revenue might lead to recessions and damage America’s reputation as a global economic refuge.
