By David J. Lynch, Jeff Stein · The Washington Post (c) 2025
President Donald Trump said Wednesday that he will impose a new 10 percent tariff on all imported goods along with an additional punitive import tax tailored for each of about 60 countries that his advisers say maintain the most unfair barriers against U.S. products.
The president’s long-awaited tariff plan is designed to spur a renaissance in domestic manufacturing and to fill government coffers with tax revenue, even as many economists warn that he is steering the U.S. economy toward slower growth and higher prices.
“In the face of unrelenting economic warfare, the United States can no longer continue with a policy of unilateral economic surrender,” Trump said during a Rose Garden ceremony before an audience of guests, reporters and members of his Cabinet.
The president’s latest trade initiative represents a breathtaking political gamble. After returning to the White House on a wave of public anger over inflation, Trump is now asking voters to put up with a renewed period of rising prices in return for the distant promise of rebuilding domestic manufacturing.
Already, economists are warning that Trump’s tax increase on imported goods will mean sticker shock on some of Americans’ most important purchases, including groceries, cars and homes.
The administration and its allies see today as the start of an epic campaign to reverse more than three decades of ill-conceived economic policy and inaugurate a new “Golden Age.”
Trade liberalization deals like the 1994 North American Free Trade Agreement and China’s 2001 entry into the global trading system placed the working class in a “race to the bottom” with low-wage workers overseas, according to Trump officials.
As corporations moved their factories offshore, they and their Wall Street investors profited while blue-collar communities in the heartland suffered.
By imposing taxes on foreign goods, Trump hopes to encourage manufacturers to move their overseas factories to the United States. Critics say the president’s protectionism will help some industries while hurting others that rely on foreign parts to make their products.
As the president has amped up his attacks on U.S. trading partners, public opinion has swung against him. In a February Gallup poll, Americans by a margin of 81 percent to 14 percent called foreign trade more of an economic opportunity than a threat.
The details have shifted over time, as the president swung between his initial inclination to impose tariffs that match the fees assessed by other nations on U.S. products, and a more uniform formula reminiscent of the “universal” 10 percent to 20 percent tariff he touted during the 2024 campaign.
The president and his aides blame the nation’s $1.2 trillion trade deficit on what they call “unfair” foreign trade barriers, including high tariffs, internal taxes and regulatory requirements. Many economists label those complaints exaggerated, saying the deficit stems from insufficient national savings.
The announcement is the culmination of weeks of internal discussions among senior Trump officials, who have tried resolving numerous conflicting purposes of the president’s tariff agenda.
Initially, Treasury Secretary Scott Bessent pitched the April 2 announcement as creating “reciprocal” tariffs, in which countries could negotiate to have their duties lowered in deals with the White House. But last week, Trump asked advisers why the administration could not impose a simple single flat tariff rate on all countries, perhaps as high as 20 percent, The Washington Post previously reported.
Having one flat tariff rate was also meant to provide an incentive for companies to invest in the United States that would not be later rescinded as part of a deal, an idea Trump had run on during his 2024 presidential campaign. Through this week, Trump officials sought to reconcile their push for a “reciprocal” tariff agenda with the president’s desire for a universal tariff, which could bring in hundreds of billions of revenue to federal coffers.
Meetings late Tuesday involved Bessent, Commerce Secretary Howard Lutnick, Chief of Staff Susie Wiles and senior advisers Peter Navarro and Stephen Miller, according to two people familiar with the matter, who spoke on the condition of anonymity to reflect private deliberations. White House aides had grown concerned about the potential stock market reaction, said Wilbur Ross, who served as commerce secretary during Trump’s first term. That may explain why the administration did not pursue a 20 percent rate.
“There are some people who want it to be one rate for everywhere, on everything. Others want it everywhere, but by product. And others want it by product and by country. So there’s different ways of trying to accomplish it,” Ross said Wednesday before the official tariff announcement. “They’ve been scurrying around a lot at the last minute.”
In recent days, the administration dismissed increasing concern among investors, economists and some members of the Republican Party about the course Trump has chosen.
“They’re not going to be wrong. It is going to work. And the president has a brilliant team of advisers who have been studying these issues for decades,” White House press secretary Karoline Leavitt told reporters.
Americans are not convinced. In a CBS News-YouGov poll released Monday, 56 percent of adults surveyed opposed new taxes on foreign goods while 44 percent approved of them; 72 percent said they expected that tariffs would mean higher prices in the short term.
The president’s allies, meanwhile, see his economic overhaul in historic terms.
Trump’s goal is to “create an environment where we’re back to where we were before World War I,” said Newt Gingrich, former GOP House speaker. Trump believes the late 19th century was when “we were the strongest economy in the world, largely built around a high tariff, high wage, high manufacturing economy,” Gingrich said.
“The current moment represents the “fifth great change in American history,” after the presidencies of Thomas Jefferson, Andrew Jackson, Abraham Lincoln and Franklin Delano Roosevelt, Gingrich said.
“There’s going to be turmoil; that’s a fact,” he said.
On Tuesday, meanwhile, a gauge of manufacturing activity showed erosion in the nation’s factory sector. The Institute for Supply Management’s closely watched monthly manufacturing index fell from 50.3 in February to 49 in March.
Companies responding to the survey said they were reducing their workforce through layoffs, attrition and hiring freezes, he added.
Los Angeles-based Xos is worried about potential new tariffs that could add $5,000 to $20,000 to the cost of components for the electric commercial vehicles it produces for customers such as FedEx. The company buys battery packs from China, electronics from Europe and motors and inverters from India and China, according to its filings with the Securities and Exchange Commission.
In response to the tariff threat, Xos plans to switch to domestic suppliers of key components “where feasible,” CEO Dakota Semler told investors this month.
“We’re absolutely going to entertain those kinds of options,” Semler said. “And in some ways that may mean cost trade-offs, slightly increased costs, but if those costs are still lower than the tariffs, then, in many ways, it still helps us to reduce our exposure.”
In little more than 10 weeks, Trump has imposed new import taxes on steel, aluminum, Chinese goods and some products from Canada and Mexico. Taken together, the tariffs already have lifted the nation’s average tariff from around 2.2 percent to about 8 percent, the highest figure in decades.
Depending on the specifics of Trump’s action Wednesday, the United States could soon have tariffs rivaling those enacted by the Tariff Act of 1930, also known as the Smoot-Hawley legislation, which most economists say made the Great Depression worse, according to Neil Shearing, chief economist for Capital Economics in London.
Relative to the size of the U.S. economy, trade is about five times as important as it was at that time, according to data from the Federal Reserve Bank of St. Louis and the World Bank.
“The world’s more trade-intensive now. The costs of trade friction are greater,” Shearing said.
On Wall Street, the S&P 500 index has lost 8 percent of its value since mid-February, when the president’s trade offensive intensified. Numerous companies have warned investors that Trump’s tariffs are costing them.
Babcock & Wilcox Enterprises in Akron, Ohio, for example, is seeing tariff bills of $10,000 to $7 million on the equipment it imports for energy and environmental projects, CEO Kenneth Young told investors Monday. The company is in discussions with its customers about how to handle the charges, which are unpredictable given the pace of administration policymaking.
“It changes daily, so who knows?” Young said. “And hopefully, some of these tariffs get removed or get reversed and business goes back to normal. But it’s just a little too early to know.”