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Threatened US tariffs signal aggressive trade policy

Friday, January 31, 2025

Significance

If this does indeed happen, it will be the first consequential instance of Trump exercising his ‘America First’ trade policy to support his foreign, fiscal, national security and industrial policy goals.

Impacts

  • A sustained use of tariffs as economic leverage against its allies risks undercutting US security ties.
  • US tariffs at an average weighted rate of 1.5% produced 2% of federal revenues in 2024; higher rates would potentially produce more.
  • Recent concern over the Chinese AI DeepSeek will prompt the closure of loopholes in the restrictions on US advanced semiconductor exports.

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