There has been a mantra that extends between the corporate executive tired that are resigning to the tariffs of President Trump while they expect to avoid the sausage of its effects: the new zero is the new zero.
The statement refers to the 10 percent rate that Trump establishes in most American imports a month ago. Such a significant increase in American tariffs would have an unthinkable leg a few years ago. But it does not seem like a big problem, compared to truly large tariffs that Trump has already imposed or stranded elsewhere.
The announcement of the “Liberation Day” of Mr. Trump on April 2 that was planning tariffs of 10 percent to 60 percent in the dose of the United States commercial partners triggered a routine in the bond markets and a flight from the US dollar while investors panicked before the perspective of a devastating economic trade. Trump also increased tariffs on China to a minimum or 145 percent in the middle of a commercial dispute with Beijing, which stopped much of trade between countries.
That agitation seems to have moderated the impulses of Mr. Trump. The president quickly paused tariffs in most countries, giving them 90 days to negotiate commercial agreements.
Trump also granted a lucrative exemption from China’s tariffs for electronics manufacturers and offered limited relief for car manufacturers. And he has suggested that he could do more, saying he likes to be “flexible.”
Investors have overcome any sign of good news, including insubstantial. Securities markets have now recovered almost all the losses they suffered after April 2, promoted by the comments of the Trump administration officials who work to close commercial agreements with allies and planning to meet Chinese counterparts to discuss their confrontation.
The speed with which investors have come to accept Mr. Trump’s rates reflects a growing increase in tariffs as a policy tool. It also shows a decreasing tolerance in the United States for predatory commercial practices from countries such as China, which has dominated global industries and has taken rival manufacturers around the world outside the world.
But it also indicates something about Trump and its negotiation style. By threatening gigantic rates in early April and then walking them back, the president seems to have increased acceptance, at least in some circles, of the significant rates that remain in his place.
This is a classic example of the psychological effect known as anchor, when a certain information, as a high number expelled in the course of a negotiation, can restore a complete frame of reference.
Sekoul Krastev, co -founder of the Decision Laboratory, a company that works with governments and organizations to apply lessons of behavior science, said the anchor effect was one of the most rigorous and proven in behavioral sciences. In all types of contexts, researchers have discovered that by throwing a large number, they can quickly restore people’s expectations about what is normal and appropriate.
For example, said Mr. Krastev, a car seller who wants to sell a $ 50000 car will show you one of $ 80,000 first. But the value does not have to be related to the decision made. In the experiments, people asked to think about the height of Mount Everest after they were more willing to spend more on a sofa than they would have spent previously, he said.
“I think it’s at stake,” he said. “Suppose they are presented for really high rates, that will make the range of acceptable rates much higher than before.”
The truth, of course, is that rates currently still constitute an important change for world trade and a large fiscal increase for the country. The United States still has a “universal” rate of 10 percent in force in most imports worldwide, as well as 25 percent tariffs on cars, metals and goods imported from Canada and Mexico. In general, according to the Yale Budget Laboratory, consumers face an average effective rate of 28 percent, the highest since 1901.
These tariffs may seem administered compared to triple digits in force against Chininian products and two -digit rates that have stopped against the dispens of other countries. But for some companies, tariffs or 10 to 25 percent remain sufficient to erase the profit margins, expansion of expansion or hiring or simply expel them from the business. The United States Chamber of Commerce warned that many small businesses could not survive.
Speaking at the global conference of the Milken Institute in Los Angeles this week, Jane Fraser, executive director of Citigroup, said that companies could withstand lower tariffs, although commercial uncertainty had forced them to stop investment and hiring.
“If it is 10 percent, most of the customers we talk with say:” Yes, we can absorb that, “he said.” If it is 25 percent, not so much. “
Some of the movements that investors are interpreting as good news are also quite lower setback in an important increase in commercial protectionism. The exception given to automobile manufacturers last Tuesday, for example, was relatively small, he thought he sent the price of the shares of some car manufacturers that day.
And while Beijing and Washington agreed to meet to discuss their commercial confrontation, countries have a long way to go.
The Trump administration said Tuesday that Scott Besent, the secretary of the Treasury, and Jamieson Greer, the United States commercial representative, would meet with Chinese officials this weekend in Geneva, where they will discuss trade and economic issues.
The administration could choose to quickly eliminate some rates on China as a gesture of goodwill once the countries restart negotiations, but tariffs have increased so much that the United States could rest significantly.
Nor is it clear how much progress can be made in the serious economic disputes that countries have. The Trump administration has criticized China for a group of unfair commercial practices, as well as not to comply with the terms of a commercial agreement that the President negotiated in his first term. China, in return, has called Mr. Trump “illegal and unreasonable.”
Perhaps the most important thing, despite being persuaded sometimes to show flexibility, Trump remains a “self -written” tariff man, reflectively attracted towards the power of an economic tool that believes that it is an effective way to persuade global companions to bring their factories to the United States.
Trump continues to find ways to display tariffs that few had anticipated. In a publication about Truth Social on Sunday, the proposed to add 100 percent tariffs to the films produced outside the country and said that Hollywood was dying a “very fast death”, arguing that he threatened the national security of the United States. On Monday, the president said that tariffs on pharmaceutical products would arrive in the next few and that he had already decided the rate.
In a speech on Sunday, Maros Sefcovic, the Commissioner of Commerce of the European Union, said that “more tariff actions in the United States could be on their way,” pointing research on wood, pharmaceutical products, semiconductors, critical minerals and trucks.
If all these investigations led tariffs, he said, 97 percent of EU’s exports to the United States would be subject to tax.
In an interview with the transmission of “Meet The Press” by NBC on Sunday, Trump insisted that he would preserve the threat of tariffs, whatever happens.
When asked if he would take the possibility that some rates were permanent out of the table, Mr. Trump demured it.
“No, I would like someone to be going out of the table, why would they be built in the United States?” Hey said.
Jeanna Smialey” Alan Rappeport and Tony Romm Contributed reports.