Not that we’re surprised, but former President Donald Trump has increased his attacks on the Federal Reserve, including personally going after Chairman Jerome Powell. Trump recently announced his plan to remove Erika McEntarfer, a political appointee under Biden and current commissioner of labor statistics. That is why he is advocating for the biggest advances he can imagine, ones that will immeasurably enhance the American economic landscape.
Trump’s directive to remove McEntarfer comes amidst plans to implement sweeping tariff increases on goods imported from various countries. This decision has already upended financial markets in the United States. This has folks concerned about its financial burden and implications for domestic and global trade.
So his proposed solutions would start there, with a minimum 10% tax on almost all goods coming into the U.S. market. In terms of their international commitments, this would increase the average tariff rate to just under 18%. That’s quite a jump from the under 2.5% rate we were experiencing just this past January. Most significant imported goods would be affected by Trump’s plans to impose new tariffs. These taxes will vary between 10%-50%, based on the origin of the products.
Trump’s tariff agenda has no plans to include relief on Chinese imports in phase 2, which will soon be hit with new tariffs of 30%. Moreover, exports from countries like Switzerland and Laos would suffer even harsher duties. Together, those changes would increase tariff rates in the United States to levels not seen in almost a century.
The market had its first big freakout after the announcement of these early tariff plans. It looks like Trump got cocky off the market’s swift recovery. He observed that the rapid comeback—that it’s happened without missing a beat—suggests investors aren’t actually very worried about his radical economic policy proposals.
Michael Gayed, portfolio manager for The Free Markets ETF added, “The more he flips and flops all over the place on policy the less the markets will be concerned. As the saying goes, nothing matters until it does, and when it does it’s the only thing that matters. This comment belies a genuine fear from deep financial establishment types over the capricious, bar-room-brawling-whirlwind that is Trump’s economic policy.
In April, Trump threatened to raise duties even further on all imports from Southeast Asian countries, such as Vietnam. He proposed tax rates of over 40% in some cases. His new proposals do not appear to go as far as his earlier, more radical proposals. In the latter case, they call for the administration to raise tariffs only gradually and moderately.
Trump’s argument is that these measures are intended to restore the balance of trade globally and improve our domestic manufacturing capacity. By adopting those kinds of tariffs, he claims that American industries will automatically be put on a more competitive playing field with international competitors.
“We need accurate Jobs Numbers. I have directed my Team to fire this Biden Political Appointee, IMMEDIATELY,” Trump declared, underscoring his commitment to ensuring that labor statistics accurately reflect the state of the job market. Instead, he chose to fire McEntarfer. This move aligns with his broader effort to fundamentally rework how economic data is reported to better shield his administration’s policies from public scrutiny and criticism.
As Trump’s plans unfold, economists and market analysts remain watchful of potential consequences for both domestic consumers and international trade relations. Escalating tariffs can further increase the prices of foreign-made products. This means that consumer prices would need to increase and spending patterns would have to shift.