Could tariffs WORK? EU offers ZERO tariffs! article, FRANCE: World rushes to negotiating table as Trump tariffs shake global markets!’

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Top administration officials said Sunday that more than 50 countries targeted by President Donald Trump’s new tariffs have reached out to begin negotiations over the sweeping import taxes that have sent financial markets reeling, raised fears of a recession and upended the global trading system.

WATCH: What to know about the effect of Trump’s tariffs on globalization

The higher rates are set to be collected beginning Wednesday, ushering in a new era of economic uncertainty with no clear end in sight. Treasury Secretary Scott Bessent said unfair trade practices are not “the kind of thing you can negotiate away in days or weeks.” The United States, he said, must see “what the countries offer and whether it’s believable.”

Trump, who spent the weekend in Florida playing golf, posted online that “WE WILL WIN. HANG TOUGH, it won’t be easy.” His Cabinet members and economic advisers were out in force Sunday defending the tariffs and downplaying the consequences for the global economy.

“There doesn’t have to be a recession. Who knows how the market is going to react in a day, in a week?” Bessent said. “What we are looking at is building the long-term economic fundamentals for prosperity.”

https://www.pbs.org/newshour/politics/trump-advisers-say-more-than-50-countries-have-reached-out-for-tariff-talks-with-white-house

FRANCE24 article:

World rushes to negotiating table as Trump tariffs shake global markets

Trump’s staggered deadlines have left space for some countries to negotiate, even as he insisted he would stand firm and his administration warned against any retaliation.

“More than 50 countries have reached out to the president to begin a negotiation,” Kevin Hassett, head of the White House National Economic Council, told ABC’s This Week on Sunday, citing the US Trade Representative.

https://www.france24.com/en/americas/20250407-world-rushes-to-negotiating-table-as-trump-tariffs-shake-world-markets
Leaders from the National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) released the following statements today in response to President Donald Trump’s tariff announcements.

“Tariffs can be a useful tool for negotiating fairer terms of trade. To that end, we are glad to see the administration focusing on long-time barriers to trade that the European Union and India have imposed on our exports. The administration has rightly noted both countries’ penchants for restricting sales of American products,” said Gregg Doud, President and CEO of the National Milk Producers Federation. “In fact, 20% reciprocal tariffs are a bargain for the EU considering the highly restrictive tariff and nontariff barriers the EU imposes on our dairy exporters. If Europe retaliates against the United States, we encourage the Administration to respond strongly by raising tariffs on European cheeses and butter. We also appreciate the President’s recognition of the sizable barriers facing U.S. dairy exports into the Canadian market.

Through productive negotiations, this administration can help achieve a level playing field for U.S. dairy producers by tackling the numerous tariff and nontariff trade barriers that bog down our exports. As the administration moves forward with negotiations on these tariffs, we encourage prioritizing getting back to fully open trade with U.S. FTA partners, targeting actors who have long put up entrenched barriers to American exports, and swiftly negotiating constructive outcomes with those we know are working for a long-term fruitful relationship with American farmers.”

https://www.nmpf.org/targeted-use-of-tariffs-and-robust-negotiations-essential-to-successful-results/

The tariff formula:

In a statement published Wednesday night (link) to explain its methodology for tariffs, the United States Trade Representative (USTR) detailed a formula that divides a country’s trade surplus with the U.S. by its total exports, based on data from the U.S. Census Bureau for 2024. And then that number was divided by two, producing the “discounted” rate. China, for instance, had a trade surplus of $295 billion with the U.S. last year on total exports of $438 billion — a ratio of 68%. Divided by two according to Trump’s formula, that yielded a tariff rate of 34%. The same calculations roughly produced the rates for other economies like Japan, South Korea and the European Union.

As previously noted, countries where the U.S. runs a trade surplus were also hit, facing a flat 10% rate regardless, as did nations where trade was roughly even — this will keep countries from trying to circumvent the tariffs by trans-shipping goods through other countries to avoid the higher tariffs.

The USTR statement said that while it was technically possible to calculate rates for actual barriers, this methodology would achieve Trump’s goal of driving down trade deficits. “While individually computing the trade deficit effects of tens of thousands of tariff, regulatory, tax and other policies in each country is complex, if not impossible, their combined effects can be proxied by computing the tariff level consistent with driving bilateral trade deficits to zero,” said the statement, which was unsigned.

https://www.profarmer.com/news/policy-update/trumps-tariffs-bring-new-era-global-trade-finally-clarity-pain-ahead

What is the motivation behind the tariffs?

There are several theories to explain why the Trump administration is implementing the largest tariff increase in over a century. We hold a multi-pronged view.

First, tariffs are revenue generators for the government – they are a form of taxation. With the Administration seeking to make the 2017 TCJA tax cuts permanent through the budget reconciliation process, they are under pressure to demonstrate that it will be long-term “debt neutral.” We believe the tariffs are intended as a mechanism to offset revenue loss from extending the tax cuts. In fact, it may be that implementing the Administration’s tax priorities is a significant factor in the calculation of the total tariff revenue to be collected. If so, then once a fiscal budget is approved later this year, we would hope that the immediate fiscal revenue imperative disappears – reducing the level and scope of the tariffs might follow.

Other motivations include a desire by the Administration to decouple from global supply chains, reduce trade deficits, and boost domestic production, thereby increasing U.S. manufacturing jobs. It is apparent that the Administration is willing to take increasingly risky positions as a negotiating tactic to achieve policy priorities. The recent announcement may simply be the starting point for further negotiation, with iterations of the policy to come based on the Administration’s fluid assessment of costs versus benefits. We don’t expect this to be the final version of tariff policy.

How will the U.S. economy be affected?

In the short term, tariffs function as a tax on imports. This policy shift represents the most significant “tax increase” in recent U.S. history. As such, they will exert a contractionary effect on the U.S. economy and put upward pressure on prices. Most analysts are quickly marking down their outlook for U.S. growth and marking up their forecasts for inflation. A short burst of “stagflation” cannot be ruled out.

In the medium term, the economic effects become more ambiguous as consumer behavior adjusts and trade patterns realign. The initial inflationary shock is expected to suppress real demand, leading to a period of subdued economic growth and potentially disinflationary pressure due to weaker consumption.

Over the long term, we do not anticipate these tariffs will remain in place in their current form. Our view is that they are primarily a strategic lever to facilitate the extension and codification of the 2017 tax cuts. Accordingly, we foresee a short-term stagflationary impulse, a medium-term environment characterized by low growth and low inflation, and a long-term reversion toward macroeconomic equilibrium as the policy environment normalizes.

It is important to note that there is considerable uncertainty around the economic implications. The durability or transience of the recent tariffs will have a considerable impact on the economic outturn. While we believe the Administration will attempt to avoid a recession, once the U.S. economy begins to adjust to the new tariff environment, it may prove difficult to course correct prior to a downturn.

https://beaconpointe.com/the-market-reacts-to-new-tariffs-whats-next-for-investors/

BREAKING: The European Union says they’re ready to negotiate with the United States, says they’ve offered zero for zero tariffs.

The announcement was made by European Commission president Ursula von der Leyen.

“Europe is always ready for a good deal. So we keep it on the table,” she said.

Von der Leyen added the EU “offered zero for zero tariffs for industrial goods, … because Europe is always ready for good deal.”

#BREAKING: Taiwan has agreed to drop ALL tariffs on the United States, joining India, Israel, Vietnam, and Cambodia, who also intend to zero out their tariffs

h/t Digital mix guy Kirk Spock