White House narrows April 2 tariffs

The White House tariffs will likely omit a set of industry-specific tariffs while applying reciprocal levies on a targeted set of nations that have trade imbalances with the US.

Donald Trump listen to US Secretary of Treasury Scott Bessent speak at the White House. Picture: AFP.

The White House is narrowing its approach to tariffs set to take effect on April 2, likely omitting a set of industry-specific tariffs while applying reciprocal levies on a targeted set of nations that account for the bulk of foreign trade with the US.

President Trump has declared his April 2 deadline to be “Liberation Day” for the US, when he will put in place so-called reciprocal tariffs that seek to equalise US tariffs with the duties charged by trading partners, as well as tariffs on sectors like automobiles, pharmaceuticals and semiconductors he repeatedly said would be enacted on that day.

Those sector-specific tariffs, however, are now not likely to be announced on April 2, said an administration official, who said the White House is still planning to unveil the reciprocal tariff action on that day, though planning remains fluid. The shift was earlier reported by Bloomberg.

The fate of the sectoral tariffs, as well as tariffs on Canada and Mexico that Trump said were justified by fentanyl trafficking, remains uncertain. The White House didn’t respond to requests for comment on if or when any of those tariffs are still planned to go into effect.

The focus of the reciprocal action now looks to be more targeted than originally thought, according to people with knowledge of the planning, though it will still hit countries that account for most of the US’s imports.

The administration is now focusing on applying tariffs to about 15 per cent of nations with persistent trade imbalances with the US — a so-called “dirty 15,” as Treasury Secretary Scott Bessent put it last week. Those nations, which Bessent said account for most of the US’s foreign trade, will be especially hard-hit with higher tariffs, said people with knowledge of the matter, though other nations could be given more modest tariffs as well.

Targeted nations are expected to be close to those laid out by the US trade representative in a Federal Register notice last month, which directed commenters to focus on nations with trade imbalances with the US, such as the G-20 nations and Australia, Brazil, Canada, China, the European Union, India, Japan, South Korea, Mexico, Russia, Vietnam and more, said a person with knowledge of the plans.

Though it will hit most imports coming into the US, the administration’s “dirty 15” approach is still a narrower one than many observers anticipated when Trump ordered federal agencies to design reciprocal tariffs in February, directing them to evaluate trading relationships with virtually every US trading partner. The White House had previously considered grouping trading partners into three tiers of high, medium and low tariffs, but turned away from that plan in recent weeks in favour of giving each targeted nation an individualised tariff number.

Nonetheless, the administration’s plan for April 2 could raise tariffs on the US’s most significant trading partners to levels not seen in decades, and people with knowledge of the planning said that targeted nations can expect to receive significantly higher tariffs.

Trump’s team could make tariffs effective almost immediately on April 2 using the president’s emergency economic authority, said people familiar with the discussions, emphasising that final decisions haven’t been made. That would be a shift from February, when a White House official said a report outlining reciprocal tariffs could be released that day but imposition would come later.

The administration’s shift comes after weeks of tough talk with trading partners and US industries alike. Officials from Canada and Mexico said they were told there was no way to avoid reciprocal tariffs ahead of April 2, though they hoped Trump would be open to reducing tariffs through negotiations after that date.

Industry officials who have talked with the White House about sectoral tariffs had been even more pessimistic about exemptions, saying they haven’t been able to glean how carve-outs would be made; one said he was told that there would be few, if any, exceptions to the tariffs.

Trump told oil executives last week during a meeting at the White House that he didn’t want to grant exceptions on tariffs, according to a person who attended the meeting, but said he would consider occasional ones.

When one attendee asked about steel and aluminum exemptions, Trump wouldn’t commit to any, this person said. When US Trade Representative Jamieson Greer spoke to the oil executives, he said he wasn’t interested in doing exemptions because they felt like they granted too many in the first Trump administration. Commerce Secretary Howard Lutnick also told the oil-industry executives that he didn’t expect exemptions, the attendee said.

A White House official disputed that description of the meeting, saying tariffs didn’t come up.

Scott Bessent, US Treasury Secretary, walking near the White House.

Another corporate executive whose company has lobbied Trump against tariffs in recent days said Trump said that Corporate America would end up liking the tariffs.

Multiple lobbyists representing Fortune 500 clients have called White House officials, looking for a path to getting exemptions, according to people familiar with the calls. Another person close to Trump said that promising any exemptions now would undercut leverage he wants later.

Some lobbyists are advising their clients to go directly to top White House or Commerce officials to explain how the tariff could affect their business, and if they are in the position to move any manufacturing back to the US in the next six months, then ask for a reprieve.

Companies are also just desperate for clarity. One Fortune 500 CEO said April 2 can’t get here fast enough.

Trump previously gave automakers a temporary reprieve from tariffs on Canada and Mexico, before pausing those levies more broadly for all products that comply with the USMCA trade agreement. But on Friday, he lamented that people had criticised him for backing down, and hinted that his approach to tariffs could shift in the coming days and weeks.

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Once you give exemptions for one company, “you have to do that for all,” Trump said, adding that “the word flexibility is an important word. Sometimes there’s flexibility, there’ll be flexibility.”

The Wall St Journal