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The line was silent.
In a phone call from the Oval office, President Trump had just delivered unpleasant news to three of the most powerful car executives in the United States: Mary Barra de General Motors, John Elkann de Stellantis and Jim Farley in Ford.
Everyone needs to fashed, Trump said in the call, which took place in early March. Tariffs will enter into force on April 2. It’s time for everyone to go on board.
Automobile chiefs, such as leaders from other industries, had been arguing that Trump’s 25 percent tariffs in cars from Canada and Mexico would wreak havoc on their supply chains and blow a hole through their industry. They had won a kind of concession when Trump agreed to give them a one -month respite, until April 2.
But now, the bosses of the three Big Three seemed to realize that it made no sense to fight for more. They had been obtained as much as they were going to get.
For corporate America, including some important donors, the shock of Mr. Trump’s second mandate is that it turns out that he has really believed that what he has been saying publicly for 40 years: foreign countries are tearing the United States and tariffs are a silver bullet for the problems of the United States. When he says that the “tariff” is the most beautiful word in the dictionary, it means.
For Mr. Trump, tariffs are not simply a negotiation tool. He believes they will make the United States rich again. And they combine two of their favorite characteristics of the presidency: they are a unilateral power that can turn on or off by whim, and create a begging economy, which forces powerful people to introduce him to suggest mercy.
This account is based on interviews with more than a dozen officials of the Trump administration and others familiar with the dynamics in the White House on tariffs. They asked for anonymity to discuss private conversations and deliberations.
In the corporate community, a group that spends a fortune in consultants to play Trump, and where the cliché of taking it “seriously but not literally” is in high circulation, many had clung to the opinion that he saw tariffs only as a leverage tool. It was not that Mr. Trump Amara the tariffs, they told themselves. It was that he loved what their threat could give in a negotiation.
Over the years, it had become a conventional wisdom that the stock market was the light and guide railing of Mr. Trump, and that any fall in the markets would limit the scope of its tariffs, which were applied more surgically seven years ago.
But Trump 47 so far has not been flash by a fall market and for the headlines that would have forced Trump 45 to the reverse. The Dow Jones industrial average has reduced more than 600 points since the new rates began. The S&P 500 slipped into a correction, which means that it has fallen by more than 10 percent since its peak.
During his first term, Trump had a weaker stomach for economic pain caused by a much narrower tariff program. He placed tariffs in more than $ 300 billion throughout his first term; Now, less than two months later, has slapped tariffs in approximately $ 1 billion of goods.
Some recent public opinion surveys show a growing number of Americans who disapprove the management of the economy by Trump, but their advisors insist that this is more about persisting high prices than tariffs.
One of Mr. Trump’s advisors, who spoke under the condition of anonymity to describe private conversations, said the presidency of Biden showed Mr. Trump that the stock market is not an infallible barometer of the future of the economy, nor a useful indicator of the feeling of voters. If it were, Biden, who presided over a booming market market, would surely be the president, said the advisor, explaining Mr. Trump’s thought.
The advisors say that Mr. Trump knows that foreign leaders are watching to see if they follow their threats, looking for signs of weakness. They have said that he believes that retreating his tariffs would permanently damage his favorite image as a strong man.
Sometimes he has granted the acquittal of the species, such as when he exempts the tariff products of Canada and Mexico that comply with their commercial agreement of North America. But he has repeatedly said that there are more and more rates on the way.
Business leaders are now quickly reassessing the cheerful assumptions that had guided their thoughts from the day of the election.
Bill Reinsch, main advisor to the Center for Strategic and International Studies and former official of the Department of Commerce, said that Trump had been explicit in the campaign on his intentions, and that his proposals tariffs this time have been much deeper and more broad than in his first mandate.
“I think it was clear,” he said. “I don’t think people have paid close attention.”
Your bad reading is understandable.
In the period prior to the 2024 elections, the new harvest of Economic Advisors of Mr. Trump sent reassuring signals to Wall Street. His public comments suggested that Trump’s second period commercial policy would be very similar to the first. In September, Howard Lutnick, now the Secretary of Commerce, described tariffs as a “negotiation chip” that would finally lead to freer markets. And Scott Besent, who became Mr. Trump’s secretary secretary, wrote in a letter to his clients last year that “the tariff gun will always be loaded and on the table, but it is rarely discharged.”
It is still possible for Trump to go back to some of his tariffs, but he is contemplating reversal, it would be news for his closest advisors. Trump has repeatedly said that he plans to issue much more extensive tariffs on April 2, and his advisors have told foreign officials and directors that he will not be deterred. Their comments to their secretaries and cabinet assistants at the Oval office meetings have a public rhetoric, according to two people with direct knowledge, who spoke on condition of anonymity to describe private conversations.
Trump editor or dictates their truth their social positions that threaten the tariffs on constant scale such as China, Canada and the European Union retaliate against their provocations. Even the former assistants who think that their maximalist approach is the incorrect one, one says that it has a valid point on how China and Europe have unfairly treated the United States when it comes to commerce.
He feels that so far the pressure has worked, attendees say, citing Mexico’s disposition to stop the flow of undocumented and fentanyl migrants in the United States. Even after Mexico presented with these measures, Trump still advanced with 25 percent tariffs before stopping his application in several articles.
One of the biggest differences between the first term and now is that Trump trusts much more in his instincts and has supplied his team with people who echo them. Rarely listen to strong dissident views on their economic policies.
Trump received a fierce opposition to tariffs in his first mandate of those who said that costs would increase for consumers and companies and slowed the economy. His team included people that Mr. Trump would mean mockingly as “globalist”, such as Steven Mnuchin, the secretary of the Treasury at that time, and the economic advisor Gary Cohn, who worked with others to stop the tariffs when taking documents from the president’s desktop, and showed the cadres and maps of the president to illustrate the benefits of trade. Other assistants, such as Larry Kudlow, were less confrontative but still skeptical of a protectionist commercial policy.
Trump’s hard business advisor, Peter Navarro, used to have Oval office matches against the so -called globalists. Now, returning for a second term, Mr. Navarro’s disputes with other advisors are more nuanced.
Mr. Besent was an executive of coverage funds, and Mr. Lutnick was the executive director of the firm of Wall Street Cantor Fitzgerald. But both have publicly adopted tariffs before their work is granted. And whatever they think about tariffs in private, no one is sitting on the resolved desk of Mr. Trump, arguing against his economic ideas. The arguments of his current team revolve around public messaging on rates, as well as exemptions and scale and timing time, but no one challenges the idea of ​​using them in some way.
Neither Mr. Trump listens to a strong dissent of Capitol Hill. Republican legislators are converts to protectionism or intimidate against speaking. The editorial board of the Wall Street Journal is the rare institution of right -wing trend that continues to constantly challenge its trade approach.
Mr. Lutnick, who also supervises the United States commercial office, receives many calls from unhappy business leaders, along with the Chief of Cabinet of the White House, Susie Wiles, and the Secretary of Agriculture, Brooke Rollins.
On the night of March 13, Mr. Lutnick, Mr. Besunt, Kevin Hasett, who is the director of the National Economic Council, and some others met at the Naval Observatory with Vice President JD Vance to discuss a public message cohesive about the economy, in the midst of complaints of allies about inconsistency, according to four people informed about the meeting.
White House officials declined to comment on the meeting.
But in a statement provided by the White House, Mr. Navarro described Mr. Trump’s advisors as following their leadership, characterizing them as “a diverse group with complementary skills sets and a high level of trust with names such as Besunt, Greer, Hasset and Lutnick that debate the closed doors and emerge as ‘One Band, One Sound’.”
Few exceptions have been granted. Mrs. Rollins listened to farmers who wanted an exemption for potassa, an important ingredient for fertilizer. Trump finally agreed a reduced 10 percent tariff, but was not happy with the respite, according to a person with knowledge of the matter. In a statement, Mrs. Rollins said the “reduction of the president of tariffs on potassa is a critical step to help farmers to administer and ensure key contribution costs in the height of the planting season while reinforcing agricultural commercial relations in the long term.”
But in many other cases, Trump seemed much less willing to offer significant exemptions of the industry than he in his first mandate.
While some industry executives have tried to withdraw during discussions with the White House, very few have said something publicly; Those who did it obtained the anger of the Trump administration. Those who have spoken in private have generally injected any criticism of Mr. Trump among luxurious praise.
Some companies have been “intimidated” about retreating tariffs, distrust of becoming some kind of objective, Reinsch said. “Nobody wants to make public,” he said, “because they are concerned about the consequences.”
But those companies still have the policies that favor, such as tax cuts and deregulation.
