Last week’s “Liberation Day” marked a kind of D-Day in the effort to reorder the international economic system. That reordering is desperately needed to address the system’s imbalances, which have led to deindustrialization and annual trillion-dollar trade deficits for the United States. But remember, far from striking World War II’s decisive blow, D-Day was just the start of the European campaign. Eleven months of vicious fighting followed, with more than 100,000 Americans killed before victory was secured. With the tariffs, too, success or failure depends on what happens next, and the nation will have to bear real costs while the outcome hangs in the balance.
The breadth, speed and severity of President Trump’s actions, which he finalized only shortly before the Rose Garden announcement, sparked immediate panic across markets and among allies. The airwaves filled with dire predictions as people scrutinized the sources and sizes of the numbers, the strategy and even the legal authority. Amid the hysteria, fair concerns have also emerged about what the plan lacks: time for companies and governments to respond, permanence for those tariffs intended to shift investments and a clear vision of the goals and how to reach them. But there are simple steps the administration could take now to correct course and move from its embattled beachhead into a sustainable forward position.
The 10 percent global tariff — a foundational permanent policy, which has already taken effect, and which carries a tolerable cost — is the right starting point. Congress should vote it into law as soon as possible. That would confirm its permanence and also provide substantial tax revenue that could help Capitol Hill solve some of its budget math problems. A bill to this effect, the Built USA Act (which I have championed), was introduced in January by Representative Jared Golden, a conservative Democrat.
For the higher, country-specific tariffs that Mr. Trump calls “reciprocal,” the first priority should be to scale them up more gradually, to give markets and allies time to adapt. Throwing supply chains into maximal disarray and imposing the highest burdens faster than companies could possibly move to avoid them leads to excessive costs with few attendant benefits. A second priority for the White House should be communicating the president’s ultimate vision and his plan for getting from here to there, so that everyone can have confidence in the direction and act accordingly. Some opacity may help in preserving leverage, but America’s core demands of its allies should be plain for all to see.
Among targets of the reciprocal tariffs, China belongs in its own category. Having already raised tariffs on China to 20 percent across the board since taking office, above other tariffs already in effect for some products, the president added 34 percentage points on “Liberation Day” and on Monday threatened an additional 50 percentage points if China didn’t back down from its retaliation. The new base line of 54 percent, absent retaliation, approximates the 60 percent tariffs for China on which he campaigned and is best understood as permanent. That’s the right move if the goal is, as it should be, to disentangle the American and Chinese economies. In his first term, he sought to make a deal with Xi Jinping. Now Mr. Trump is, rightly, walking away.
But going from 0 to almost 60 so fast is unnecessary and unwise. The most determined company could not shift production so quickly. A better approach would be to raise the tariff in three steps — 20 percentage points now, in a year, and in two years — and for Congress to legislate this by revoking China’s permanent normal trade relations status, as was the bipartisan recommendation of the House Select Committee on the Chinese Communist Party and the U.S.-China Economic and Security Review Commission in 2024. Legislation already exists for this, cosponsored by Marco Rubio (now Mr. Trump’s secretary of state) when he was in the Senate and accompanied by a bipartisan bill in the House. That legislation envisions tariffs on strategically important goods rising in steps over five years.
Finally, Mr. Trump has the reciprocal tariffs that he has set country by country in proportion to their trade imbalance with the United States. These appear to be temporary in nature, intended as leverage to make other countries adopt policies that promote balanced trade. Few expected these tariffs would be set so high, especially atop the global 10 percent. Among allies who have expressed openness to negotiating but are still unsure what they have to do, these are a source of understandable consternation.
The high reciprocal tariffs appear structured to maximize the credibility of the president’s commitment, to ensure that every country take his threat seriously, but his previous actions, along with moves toward permanent global and China tariffs, accomplish that aim. There is a limit to the costs the American people and American allies will bear, especially without constant reminders of a coherent long-term vision. The president should want to minimize the short- and medium-term harm to businesses and supply chains that must survive disruption if they are to thrive in the long run.
For the many trading partners that have come forward to negotiate, little would be lost and much saved if Mr. Trump thanked them with a six-month grace period in which to bring their best offers to the table. Those who fail to deliver could be hit with half the Rose Garden tariff rate and be given six more months to get it right before the full weight lands. Businesses would have time to assess their risk and plan accordingly, facing a landscape in which the obvious imperative is to start investing in the United States.
Whatever path he chooses, Mr. Trump could greatly increase the odds of successful negotiations and the largest possible U.S.-led economic bloc by explaining exactly what he wants. The United States gains nothing from refusing to articulate a vision clearly.
So what is the goal? Based on the administration’s public remarks, it is to eliminate large trade imbalances within a U.S.-led bloc that excludes China, other nonmarket economies and any country determined to continue running large surpluses at the expense of its partners. In remarks on Monday, Stephen Miran, the head of the White House Council of Economic Advisers, emphasized that the administration also sees security commitments as indelibly tied to economic ones.
If those are the contours, Mr. Trump should say so, outline the kinds of concessions he expects from allies seeking to rebalance trade and detail the common policies toward China that all members of the bloc must adopt. (Mr. Miran’s remarks, which answered the question “what forms can that burden sharing take?” with five different suggestions, were an important step in the right direction.) Then the president can sit back and await best offers. Thanks to early actions against our closest neighbors, renegotiation of the United States-Mexico-Canada Agreement will begin soon. A successful new deal would establish a strong North American core for any future bloc and signal clearly what the United States expects from others.
Finally, Mr. Trump’s administration needs to get serious about other policies necessary to support reindustrialization. If the United States is going to reduce its trade deficit quickly without painful cuts to domestic consumption, it’s going to have to increase production capacity just as quickly, either to expand exports to other markets or to substitute for imports at home. This requires industrial policy akin to what the CHIPS and Science Act has already achieved for semiconductor manufacturing, with help from new forms of public financing and accelerated permitting. New infrastructure will have to be built and new sources of energy brought online. Perhaps most critically, enormous resources must be poured into work force development.
The first days of a war are rarely determinative of its outcome, and even the best plan changes when it meets the real world. Leaders get the opportunity to prove their mettle in those moments when they must adapt under fire to better pursue an unwavering goal. For Mr. Trump, the battlefield awaits.
Oren Cass is the chief economist at American Compass, a conservative economic think tank, and writes the newsletter Understanding America.
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