No, Trump is not eyeing pared-back tariffs

President-elect Donald Trump on Monday pooh-poohed reports that his aides are considering a watered-down version of his universal tariff plan.

Sources told The Washington Post that Trump’s aides were reportedly exploring a new tariff plan that would affect every country but cover only so-called critical imports. This seemed to suggest a strong pivot away from Trump’s initial plan to impose tariffs across the board, including a 25% tariff on imports from Canada and Mexico.

But Trump dismissed The Washington Post’s report as “Fake News” in a statement posted on Monday to his Truth Social platform. He also suggested he’ll make good on his earlier promises, which also include a 60% tariff on Chinese goods.

“The story in the Washington Post, quoting so-called anonymous sources, which don’t exist, incorrectly states that my tariff policy will be pared back,” Trump wrote. “That is wrong. The Washington Post knows it’s wrong. It’s just another example of Fake News.”

That Trump would move forward with his plans for universal tariffs is not all that surprising. The president-elect’s fixation with tariffs and his plan to impose them on the country’s largest trading partners was arguably the centerpiece of his economic message during the 2024 campaign. 

Even many voters’ and Republican lawmakers’ reported opposition to Trump’s tariff plans hasn’t deterred him. Nor has the fact his plan could ignite a global trade war.

“The Tariffs, and Tariffs alone, created this vast wealth for our Country,” Trump posted to X this past Friday. “Then we switched over to Income Tax. We were never so wealthy as during this period. Tariffs will pay off our debt and, MAKE AMERICA WEALTHY AGAIN!”

According to The Washington Post, the Trump team’s preliminary plan for tariffs included levying a tax on certain sectors deemed critical to national or economic security. Though it wasn’t clear which specific industries would get hit the hardest, early discussions apparently focused on sectors such as the defense industrial supply chain, which affects aluminum, copper, iron, and steel; critical medical supplies, like syringes and vials; and energy infrastructure, like batteries, rare earth minerals, and solar panels. 

“The sector-based universal tariff is a little bit easier for everybody to stomach out the gate. The thought is if you’re going to do universal tariffs, why not at least start with these targeted measures?” one of the people familiar with Trump’s plans told the Post. “And it would still give CEOs a massive incentive to start making their products here.”

Despite Trump’s denial, the report raised hopes in financial markets. The back-and-forth between Trump and The Washington Post led the U.S. dollar index down—and then back up again slightly—on Monday morning. According to Business Insider, the U.S. dollar pared its losses to roughly 0.5% after Trump blasted the report.

Economists, however, have blasted Trump’s tariff plan, saying it would raise prices. Retailers such as Best Buy, Lowe’s, and Walmart are already poised to raise prices in anticipation of Trump’s tariffs.

Meanwhile, an August estimate from the Peterson Institute for International Economics, a nonpartisan think tank, found that Trump’s tariffs would cost the average U.S. household more than $2,600 per year. According to ABC News, clothes, electronics, and toys will be most impacted by Trump’s tariffs, if implemented. 

Trump has admitted he likely won’t be able to lower the cost of groceries in the coming years. Now prices on everything will just get even worse.