Trump’s boosters laud his tariff flip-flop but consumers are not buying it
Washington: Another day, another tariff backflip. This time it was a Friday night carve out for smartphones, laptops, computer parts and other electronics, which will no longer be subject to the 125 per cent tariff Donald Trump placed on goods from China.
It’s a significant backdown because about a quarter of US imports from China are electronics – even more than several other countries that have had their tariffs temporarily reduced to 10 per cent.
Still, Trump and his lieutenants were upset to see this called out as yet another tariff flip-flop. Administration figures were out in force on the Sunday morning political talk shows saying electronics, including all-important semiconductors, would instead be part of a separate “bucket” of tariffs to come in the next month or two.
Donald Trump’s tariff policies are making American consumers jittery.Credit: Bloomberg
“They’re going to have a special, focused type of tariff to make sure those products get re-shored,” Commerce Secretary Howard Lutnick said on ABC’s This Week. “We need to have these things made in America.”
Lutnick recently shocked economists when he suggested that, thanks to Trump’s tariff blitz, America would soon be home to an army of millions of workers “screwing in little screws to make iPhones”.
US Trade Representative Jamieson Greer, who last week said there would be no exemptions because “we can’t have a Swiss cheese solution to this universal problem”, told CBS’s Face the Nation it was misleading to say electronics were exempt.
A Foxconn iPhone production line in Shenzhen, China.Credit: AP
But a few minutes later he tripped up while explaining electronics were being investigated as part of a slew of national security tariffs. “That’s why they’re exem… that’s why they don’t have a tariff covered right now.”
Later, Trump took to Truth Social to insist there was no exception for electronics.
“These products are subject to the existing 20 per cent fentanyl tariffs, and they are just moving to a different tariff ‘bucket’. The fake news knows this, but refuses to report it,” he said.
“NOBODY is getting ‘off the hook’ for the unfair trade balances, and non-monetary tariff barriers, that other countries have used against us, especially not China which, by far, treats us the worst.”
Every time Trump changes direction, his boosters explain he is actually following a grand plan that lesser mortals may not understand. This was even the case last week when he “paused” his planned tariffs after admitting investors and the bond market were getting the yips.
Shoppers in Soho, New York. US consumer confidence fell in March to the lowest level in four years.Credit: Bloomberg
That did not stop deputy chief of staff Stephen Miller lauding his boss’s “master strategy, bold statesmanship and brilliant tactical planning”, while press secretary Karoline Leavitt chided reporters for failing to appreciate “the art of the deal”.
Their Comical Ali routine is getting tired. And we know it’s failing to convince Americans they are in safe hands because on Friday, a closely watched barometer of US consumer confidence hit a near-record low.
The University of Michigan’s consumer sentiment index plunged to 50.8, down from 57 in March and 77.2 this time last year. Since 1952, the only time it has been lower was in 2022 amid a post-pandemic inflation surge.
Survey director Joanne Hsu noted the decline was “pervasive and unanimous across age, income, education, geographic region and political affiliation”.
Americans have good reason to be nervous. The Budget Lab at Yale University says Trump’s tariffs create an overall average tariff rate of 27 per cent, the highest since 1903, costing the typical household an estimated $US4700 a year ($7470). And that is after accounting for the “pause” on his global tariff barrage.
Nonetheless, the Lab’s economics director Ernie Tedeschi believes the US economy is strong enough to avoid recession, writing that the tariffs will probably be “painful but not quite debilitating”. But he acknowledges economists have been known to be wrong sometimes, and it could end up being “catastrophic”.
On board Air Force One over the weekend, Trump indicated he would say more about electronics tariffs on Monday (Tuesday AEST). But The Wall Street Journal’s editorial board – a constant bee in Trump’s bonnet on this subject – made its judgment clear.
“All of this exposes the arbitrary political nature of tariffs,” it said. Industries with market clout and powerful lobbyists win reprieves. Those without pay the price.
Most Viewed in World
>read more at © Sydney Morning Herald
Views: 0