The report says that the US president is planning to roll back some tariffs on steel and aluminium goods, largely as a move to bolster his public image ahead of the November midterm elections. As a reminder, Trump slapped steel and aluminium imports with tariffs of up to 50% last year and even expanded that to cover a wide range of household goods made from other metals such as washing machines and ovens.
The sources noted that the commerce department and US trade officials are of the view that tariffs were hurting consumers quite significantly by raising prices for goods. And that has created some outrage among voters in what they feel is now seen as an affordability crisis.
As such, the softer stance seems to be a move that is to avoid further political backlash. That in hopes of boosting Trump’s approval ratings ahead of the midterm elections at the end of the year.
The US administration is reported to be now reviewing the list of products affected by the levies and plans to exempt some items. Adding to that, they will also put off from making the list longer than it currently is and instead launch more targeted national security probes into specific goods.
The latter point is a notable one as the earlier tariffs had no proper breakdown and everything and anything was just punished with levies. I mean when bicycle parts are also included in the list of goods needing to be tariffed as part of “national security”, it does say something about the inclusion process.
Anyway, all of this reinforces the point that Trump is still one to walk back on tariffs after talking up a big game. If not for the stock market, then it is at least to make sure that he is still able to appease his voter base.
However, the back and forth policy shifts here once again reaffirms that there is no coherent and consistency when it comes to policy administration by the US. And that is something that markets have been punishing the dollar for since last year.
The full report can be found here (may be gated).
This article was written by Justin Low at investinglive.com.
