White House eyes major tariff overhaul as Trump pushes for economic reform

White House advisors have drafted a plan to impose tariffs of around 20 per cent on most imports to the US, as President Donald Trump pushes for one of the most significant reforms to the global economic system in decades.

This move could have far-reaching consequences, potentially sending shockwaves through the stock market and the global economy, Caliber.Az reports via foreign media.

If these tariffs are enacted, the US economy could quickly slip into a recession, lasting more than a year, as retaliatory actions from trading partners are expected. Moody’s chief economist Mark Zandi warned that the resulting economic downturn could push unemployment above 7 per cent, describing this as a worst-case scenario. Despite the far-reaching implications, White House officials have stressed that multiple options are still being reviewed, and no final decision has been made. President Trump has indicated that the tariffs would likely be “reciprocal,” meaning they would correspond to tariffs imposed by foreign nations on US exports.

The president also suggested that some countries might be exempt from these duties, potentially reducing the severity of the proposed tariffs. The administration has been preparing for the announcement of new tariffs, which President Trump has dubbed "Liberation Day." Despite economists’ warnings, the White House has dismissed concerns, noting that similar predictions of doom were proven wrong during Trump’s first term when more modest tariffs were implemented. 

Administration officials maintain that these tariffs are necessary to rebalance a global trade system that has historically favored other nations at the expense of US factory communities. “The president will be announcing a tariff plan that will roll back the unfair trade practices that have been ripping off this country for decades. He’s doing this in the best interest of the American worker,” said White House Press Secretary Karoline Leavitt. The specifics of the tariffs are still unclear, but the magnitude of the proposed tariffs indicates Trump’s intention to reshape the global economic landscape. One option being considered would involve raising import duties on products from nearly all countries, rejecting more targeted approaches suggested by some senior advisers. 

This move is backed by the 1977 International Emergency Economic Powers Act, which grants the president significant authority to regulate international transactions. Sources within the administration have said that, in combination with additional tariffs on sectors such as automobiles and pharmaceuticals, the plan could generate over $6 trillion in new federal revenue—potentially the largest tax increase in decades. 

Officials are also discussing using this revenue to finance tax rebates or dividend payments to most Americans, though these plans are still in the early stages. The White House is also considering imposing different tariff rates on individual countries. Trump hinted that tariffs could vary depending on the charges imposed by foreign nations, stating, “Whatever they charge us, we’ll charge them.” A White House spokesman declined to comment on these developments. 

Despite the flexibility in the plans, sources emphasized that Trump has recently advocated for a universal tariff, believing it would be a simpler approach compared to a country-specific strategy. “You’d start with all countries,” Trump told reporters aboard Air Force One. While Trump has suggested that the tariffs could apply to all countries, he also mentioned last week that he would be “lenient” in some cases. White House Press Secretary Karoline Leavitt declined to provide details ahead of the Rose Garden announcement, but when asked if farmers would be affected, she stated, “No exemptions at this time.”

By Naila Huseynova