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"Trump Wants Tariffs Much Higher than 2.5%"... Supporting Hardliners [Global Tariff War]

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Korea Economic Daily
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  • U.S. President Donald Trump announced that he is pushing for the introduction of universal tariffs "much higher" than 2.5%.
  • Howard Lutnick, the nominee for Secretary of Commerce, supported Trump's plan, dismissing claims that tariffs cause inflation as "nonsense."
  • President Trump's tariff targets are primarily the pharmaceutical, semiconductor, and steel industries.
STAT AI Notice
  • The article was summarized using an artificial intelligence-based language model.
  • Due to the nature of the technology, key content in the text may be excluded or different from the facts.

Trump Initiates Universal Tariffs

"Incremental Increase by 2.5%? I Want More"

Image = ShutterstockImage = Shutterstock

U.S. President Donald Trump is making the introduction of universal tariffs against the world a fait accompli. On the 27th, President Trump publicly opposed the gradual universal tariff plan proposed by Treasury Secretary Scott Besent, stating that he wants "much higher" tariffs. Howard Lutnick, the nominee for Secretary of Commerce, also strongly supported Trump's tariff plan on the 29th (local time), dismissing claims that tariffs cause inflation as nonsense.

○ Trump Weighs in on High-Level Universal Tariffs

The Financial Times (FT) reported on the 28th that Treasury Secretary Besent is pushing for universal tariffs starting at 2.5% and gradually increasing. FT explained that this approach is to 'give companies time to adapt and provide countries with an opportunity to negotiate with the U.S. government.' The highest tariff rate mentioned was 20%, which President Trump referred to during last year's campaign.

However, just hours later, President Trump told reporters on a plane that he wants tariffs "much, much higher" than 2.5%. He mentioned that Besent's plan is not supported and differs from what he wants. He further stated, "I have a certain level in mind for tariffs, but I haven't decided yet," adding, "But that level will be sufficient to protect our country." It seems President Trump has publicly sided with the tariff hardliners.

President Trump identified pharmaceuticals, semiconductors, and steel as major industries subject to tariffs. During a Republican Federal House Conference speech on the 27th, he said, "If we hadn't imposed massive steel tariffs during the first term, there wouldn't be a single steel plant in the U.S.," and "If we hadn't imposed tariffs on washing machines and dryers, companies like Whirlpool in Ohio would have all gone bankrupt." He also cited Korean washing machines as an example of saving local manufacturing through tariffs.

◆ Scott Besent, Treasury Secretary

"Universal tariffs starting at 2.5% with gradual increases"

◆ Donald Trump, President

"Wants tariffs much higher than 2.5%"

◆ Howard Lutnick, Secretary of Commerce Nominee

"Claims that tariffs cause inflation are nonsense"

○ "Korea and Japan Have Taken Advantage of Us"

As President Trump stated that universal tariffs should be "much higher" than 2.5%, the tariff hardliners are gaining momentum.

They argue that imposing high-level tariffs from the start sends a strong message to countries worldwide. Lutnick, a representative figure among the tariff hardliners, expressed support for President Trump's 'strong tariffs' stance during a hearing, preferring blanket tariffs over selective ones. He also dismissed claims that tariffs cause inflation, stating, "India and China have high tariff rates, but their inflation rates are not high," calling it "nonsense."

Lutnick was previously known to have sent a letter to President Trump during his competition with Besent for the Treasury Secretary position, suggesting that 'Besent does not support tariffs.' Although both are from Wall Street, their attitudes on this issue are significantly different.

Lutnick also echoed President Trump's perception that allies are 'taking advantage of us.' When asked if it is appropriate to impose tariffs on allies other than China, he said, "Tariffs on China should be the highest, but the fact that Americans can't sell American cars in Europe needs to be corrected." He further claimed, "Our great allies have taken advantage of our goodness," and "Japan's steel and Korea's appliances have just used us."

○ No Promise on Chips Act Subsidy Payments

When asked whether the Biden administration would fulfill the promised Chips Act subsidies to semiconductor companies in Korea and Taiwan, he took a reserved stance. Lutnick stated that the law is a "great start-up fund to restore semiconductor production in the U.S.," but he couldn't guarantee the fulfillment of the subsidy payment contracts. He also said that the tax credit provided for leased electric vehicles in the Inflation Reduction Act (IRA) "should end," which could impact companies like Hyundai.

However, Lutnick mentioned during the hearing that the tariffs on Mexico and Canada, which were to be implemented from the 1st of next month, were a negotiation tactic. He said the 25% tariff is a short-term tactic limited to immigration and fentanyl issues at the border, and that the two countries "can avoid it if they just implement (blocking immigration and fentanyl inflow)." As this statement was conveyed, the possibility of Canadian crude oil being imported into the U.S. increased, causing the price of West Texas Intermediate (WTI) to drop by about 1.6% to below $73 per barrel at one point.

Washington Correspondent Lee Sang-eun selee@hankyung.com

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