Donald Trump open to reducing tariffs in return for 'phenomenal' offers

Trump broadly defended his tariff program despite a stock market meltdown, saying he was happy that interest rates were falling and believed that the economic turbulence would settle

Don't want to miss the best from Business Standard?

By Annmarie Hordern

 

President Donald Trump said he was open to reducing his tariffs if other nations were able to offer something “phenomenal,” indicating that the White House was open to negotiations despite the insistence of some top officials. 

Trump, speaking on Air Force One on Thursday, broadly defended his tariff program despite a stock market meltdown, saying he was happy that interest rates were falling and believed that the economic turbulence would settle.

 

“The tariffs give us great power to negotiate,” Trump said, adding that “every country has called us.”

 

Asked if that meant he was considering relenting, Trump said it “depends.”

 

“If somebody said that we’re going to give you something that’s so phenomenal, as long as they’re giving us something that’s good,” Trump said. 

 

Yet the president also flagged more levies are on the way.

 

“The chips are starting very soon,” Trump said. “The pharma is going to start coming in, I think, at a level that we haven’t really seen before. We are looking at pharma right now. Pharmaceuticals. It’s a separate category. We’ll be announcing that sometime in the near future. It’s under review right now.”

 

Pharmaceutical stocks in India fell Friday as shares declined across Asia. Index futures for the US and Europe dropped, the greenback extended its slide while yields on the 10-year US Treasury dipped below 4 per cent again as the tariff moves continue to reverberate through markets. 

 

The president spoke after one of the worst days for stocks since the height of the coronavirus pandemic. About $2.5 trillion was erased from the S&P 500 on Thursday, with the gauge down almost 5 per cent. The Russell 2000 of smaller firms extended its plunge from a 2021 all-time high to 20 per cent on speculation the president’s trade offensive will stunt the American economy. 

 

Trump reiterated that he would, in particular, be willing to offer tariff relief for China if Beijing approved the sale of the US operations of ByteDance Ltd.’s TikTok social video app. The service is facing a Saturday deadline for divestment, unless Trump offers an extension as part of his efforts to broker an agreement.

 

Trump said they were “very close to a deal.”

 

“I think that maybe China will call and say, ‘well, we’re upset with the tariffs,’ and maybe they want to get something a little bit in order to get TikTok approved,” Trump said, while cautioning he had “no knowledge” that Beijing would seek that approach. 

Trump indicated he had spent the day in conversations with foreign governments and business leaders seeking tariff relief. The president said he spoke to automaker executives on Thursday, but declined to name them, as well as Israeli Prime Minister Benjamin Netanyahu, whom Trump said could visit the US next week. 

 

Israel earlier this week removed its tariffs on US goods in hopes of being spared from Trump’s tariffs, but the White House announced that Israeli goods would face a 17 per cent rate.

 

“I think our markets are going to boom. Got to give it a chance,” Trump said. “Got to give it a little bit of time.”

 

Trump pointed out a fall in energy prices and 10-year yields, casting them as a positive.

 

“One thing I like is interest rates going down, like groceries going down,” he said. “I like eggs going down, if you look at it. And very importantly, the gasoline prices are going down.”

 

The US president also said he believed the UK was happy about its treatment under his new tariff regime. The UK is facing the minimum 10 per cent tariff, while European Union nations have seen a 20 per cent rate imposed.