(Bloomberg) -- Aides to President-elect Donald Trump are considering a tariff plan that would apply to all countries but be limited to specific critical imports, the Washington Post reported, citing three people familiar with the discussions who it didn’t identify.
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If implemented, the plan would mark a significant narrowing of the universal tariffs of 10% to 20% that Trump had proposed during his campaign, a move economists expect to drive up consumer prices and distort patterns of global trade.
Trump’s transition team didn’t immediately respond to a request for comment.
The US dollar fell against most major currencies Monday after the report, with the Bloomberg Dollar Spot Index declining 0.9%, its biggest drop since November, while the euro rallied more than 1% against the greenback. Investors also added to bets on Federal Reserve interest-rate cuts on speculation the policy won’t fuel inflation as much as a broader program.
Which sectors or goods would be targeted wasn’t immediately clear but would likely focus on those seen as key for economic and national security, and discussions have focused on those that Trump intends to bring back to the US, according to the report.
Trump’s focus potentially includes the defense industrial supply chain — through tariffs on steel, iron, aluminum and copper — as well as critical medical supplies, such as syringes, needles, vials and pharmaceutical materials. Trump could also target energy materials including batteries, rare earth minerals and solar panels, the Post reported, citing two of the people.
It’s unclear if the approach toward universal tariffs would also apply to other policies Trump has proposed. Those include slapping duties on an all goods from China of as much as 60%, as well as 25% on imports from Mexico and Canada unless they do more to stem the flow of migrants and fentanyl into the US.
With about two weeks until Trump’s inauguration, the threats around his tariff plans have already caused stress in the global trade system, as well as uncertainty about the path of inflation and interest rates.
Bloomberg Economics’ base case last last year saw three waves of tariff hikes, starting in summer 2025, with levies on China ultimately tripling by the end of 2026 and a smaller hike on the rest of the world — focused on intermediate and capital goods that don’t directly impact consumer prices.