Is Trump’s tariff zeal beginning to wane?

The President can’t stop talking about his favorite word – tariffs – although this week his comments are having a new effect. Rather than plummeting, the stock market is showing signs of life – climbing by more than 1 percent – on the news that Donald Trump’s plans for “reciprocal” tariff seemed to have been scaled back significantly. 

For weeks the President has been suggesting that come April 2, trade retribution would really kick in: any country that has an “unfair” trading partnership with the United States (Trump was even thinking of extending this to taxes like VAT) would see an equal import tariff imposed on the country. This has been a large contributor to terrified market reaction, as investors have been bracing for a new kind of trade war – something much more spectacular and painful than Trump even considered in his first term.

But the President has had, if not a change of heart, than a change of strategy. Rather than target the world, Trump now has his eye on what his Treasury Secretary Scott Bessent has dubbed the “dirty 15” – a select number of countries that make up a significant chunk of imported goods to the United States. Countries likely to experience some kind of trade tax include the three Trump has been pursuing since day one of his inauguration – China, Canada and Mexico – but also include other major trading partners and allies, such as the European Union, India, Australia and Japan. 

Just how far the President will take the tariffs remains uncertain, but crucially even the tariffs on these offenders in Trump’s eyes are likely to be more narrow than those he first announced. The Trump administration is looking more specifically now at particular industries, especially those that have been a concern since the 2010s, including EVs and auto imports. But not all sectors are expected to be impacted, giving some hope to markets (and certainly businesses) that not every industry will be upended overnight.

Will this narrowing of tariff plans last? It’s a full week before we reach the second, and as is so often the case with the President, anything could change. But for all the talk of tariffs as fantastic public policy, the first few months of Trump’s presidency has suggested mixed feelings inside the administration, and perhaps even with Trump, for these taxes. There is no doubt that the President plans to use import taxes to bend the arm of other nations – but the ideological zeal with which he talked about tariffs on the campaign trail seems to have waned. If the President’s claims – that tariffs really do benefit American businesses and consumers – were conviction, he might be pushing ahead full steam with his original plan to implement them across the globe. Instead, the plan consists of some old tactics and some new ones – both more targeted at trying to get other nations to change their behavior.

The latter may already be working. The UK, for example, is gearing up to debate its Digital Services Tax, which puts a 2 percent levy on big tech companies, disproportionally affecting American tax firms. The Labour government, long a champion of such a tax, is now thinking about a “tax trade” with America – remove the DST and avoid further tariffs. If these are the kinds of discussions that come out of the tariff threats, the President will be increasingly happy. But they are not a sign that tariffs will be with us indefinitely. Indeed, they remain a sign that even Trump would like to avoid them. Not everyone in MAGAworld will agree.