It’s Been a Remarkable Few Days for U.S. Trade Policy

Getty Images

Here's how companies (and governments) have responded to the Trump administration's newly raised tariffs.

The sweeping tariffs President Trump announced last week drove the news all day Monday. The stock market, having plunged Thursday and Friday, swung wildly before ended the day essentially flat, and billionaire Republican donors lined up to denounce the measures. Even Elon Musk had something to say.

That's the financial news. It will take some time before the tariffs work their way into the economy, and they only went into effect over the weekend. If the tariffs stick - 10% on imports from virtually every country and higher rates on others, like China and Vietnam - prices on many consumer goods and groceries will likely increase.

That's if. U.S. Treasury Secretary Scott Bessent said Monday afternoon that 70 countries had reached out to begin negotiations over the new rates. Still, the Trump administration is likely to be a tough customer. In his first term, President Trump raised tariffs on steel and aluminum only to see them slowly carved up by carveouts for individual countries that sapped their effective relief; and his big Phase One bilateral trade deal with China petered out when China didn't buy the U.S. goods it had committed to buying.

Those experiences may have left an impression because the president, despite the sell-offs, criticism and reports to the contrary, is not talking like he's about to bend. "We're going to get fair deals and good deals with every country. And if we don't, we're going to have nothing to do with them," Trump said Monday from the Oval Office.

Okay! The stated goal of these tariffs is to reshore manufacturing activity to the United States. For that to work, they'll need to be paired with industrial policy that will induce domestic investment. It remains to be seen what the administration will do regarding those kinds of plans.

But just because tariffs have increased doesn't mean that manufacturing investment and activity has suddenly dried up in the United States. GM upped pickup production at an Indiana assembly plant. A British heavy equipment manufacturer doubled the size of its investment in a new San Antonio factory to $500 million. Japanese automaker Nissan reversed its plans to cut production at a Tennessee factory. Other companies are looking for ways to defray costs without passing them on to consumers. Hyundai, for instance, which imports many of the vehicles it sells in the U.S. from South Korea, vowed not to raise its prices. Other automakers, like Ford and Stellantis, extended their employee discounts to the public.

Meanwhile, many foreign governments aren't yet escalating. Well, China has, and Trump in return has threatened to increase tariffs on Chinese imports even higher. But others countries like Columbia, the Philippines, and Taiwan have offered to or have reduced their own tariffs on U.S. goods in response. Others still, like the Treasury secretary alluded to, are seeking negotiations. Delegations from Japan and South Korea are coming to Washington, Indonesia is preparing to send one, and the European Union has threatened to retaliate but is still seeking a deal.

All told, it's been a remarkable week in the recent history of U.S. trade policy. The news is moving fast, but if you still need a baseline refresher of all the new tariff developments, listen to the latest episode of the the Alliance for American Manufacturing's podcast The Manufacturing Report. In it, AAM's Scott Paul and Scott Boos lay them all out so they're easy to follow. Watch it below: