‘Nothing is off the table’ when it comes to Trump’s tariff plans

The news: President-elect Donald Trump is considering taking the dramatic step of declaring a national economic emergency so he can implement universal tariffs on allies and adversaries, per CNN.

• The approach would grant Trump wide-ranging discretion over how to implement tariffs without needing to prove the tariffs are grounded in national security concerns.
• Trump’s advisors are exploring other avenues as well, including Sections 338 and 301 of US trade law. Section 338 lets a president impose duties on countries that discriminate against US commerce, while Section 301 allows action against foreign governments that violate trade agreements or engage in unreasonable, discriminatory, or unjustified practices.

“Nothing is off the table,” a source told CNN.

Why it matters: The huge amount of uncertainty surrounding Trump’s plans is creating stress for both retailers and consumers.

• Retailers like Costco are rushing to import goods, driving up shipping costs. It cost about $6,000 to book a 40-foot container from Asia to the US West Coast on January 1, a 50% jump from December, per Xeneta data cited by Bloomberg. While some merchants might absorb those costs, many will likely pass them on to consumers, driving up prices.
• Consumers are pulling spending forward. Fears that steep tariffs will drive up big-ticket item prices spurred an auto sales spike in Q4. The same worry pushed a record 1 in 4 Americans to see it as a good time for major purchases—up from 1 in 10 a month earlier, per the University of Michigan’s December consumer survey.

Tariff threats are also creating ripple effects around the world: They contributed to Canadian Prime Minister Justin Trudeau’s resignation and increased the likelihood that Chinese policymakers will allow the yuan to weaken.

Our take: The impacts of Trump’s tariffs are already being felt—even before their shape and structure are known. Whatever form they take will likely be a major jolt to retailers and manufacturers around the globe.

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