[Text/Observer Network Xiong Chaoyi] US President Trump insisted on throwing out the "reciprocal tariff", causing a great deal of damage to global trade, and has triggered severe market fluctuations in recent days, with the risk of "recession" looming.
According to Bloomberg, citing sources on April 7, officials in the Trump administration are debating whether to establish new export tax credit policies, which also implicitly acknowledges the potential harm that White House tariff policies may cause to American businesses. The anonymous sources said that this tax rebate policy aimed at boosting American manufacturers will be implemented by the end of the year to offset the impact of retaliatory tariffs when American companies sell goods in overseas markets.
The sources also said that this tax credit policy still needs approval from the U.S. Congress, and its scope of application may extend to enterprises providing overseas services. It is understood that neither Trump nor Treasury Secretary Bessent have officially received a briefing on this plan, and this policy proposal has already caused divisions within the government's economic team.
The report said it is unclear whether this tax credit policy as a tariff balancing strategy can gain support. Nevertheless, this proposal reflects intense debates within the Trump administration - some of Trump's allies are attempting to mitigate the negative impacts of his recently announced "reciprocal tariff" on almost all countries.
Trump answering reporters' questions at the White House, video screenshot, April 7
A representative of the White House did not respond to Bloomberg's request for comment. The Treasury Department said in a statement: "While discussions about specific terms are still in their early stages, Secretary Bessent's consideration of tax issues is entirely based on his full support for Trump's 'America First' economic agenda. Whether any proposals submitted to him will ultimately receive his support will fundamentally depend on this criterion."
Bloomberg reported that this exporter tax credit plan was accelerated locally on April 4, indicating that some of Trump's economic advisors have doubts about the rationality of his trade policy.
According to the sources, this tax credit will serve as a subsidy for American companies selling products overseas, alleviating operational pressure after retaliatory tariffs take effect. However, American importers are directly impacted by Trump's latest tariff policy because they will have to bear higher costs for purchasing goods from trading partners.
The sources said that Trump's economic advisory team is also considering whether to include importers in the tax credit benefit range, but such plans are more difficult to formulate. Trump once claimed that his tariffs would stimulate more companies to move production lines back to the United States. Economists and business leaders warned that rebuilding supply chains could take years, and the short-term impact of tariffs might lead to a global recession.
After Trump announced the so-called "reciprocal tariff" on April 2, the US stock market experienced an "epic crash." Previously, Treasury Secretary Bessent had been calming the public by saying the stock market crash was a "short-term reaction," but he flew to Florida on April 6 to try to persuade Trump to "make changes."
"Politico" cited two sources who said that Bessent urged Trump to focus on negotiating "favorable trade agreements" and begin emphasizing reaching deals with other countries, otherwise the US stock market would face further declines.
"Bessent's view is that unless you make changes, the market will continue to collapse," one source said. "You won't abandon this policy, but you must start talking about negotiations and the ultimate results."
A second source said that after Trump announced the new tariff measures, 50 countries proactively proposed discussing the new US tariff system, which is an opportunity to determine the next steps. The person described Bessent's view that Trump's recent introduction of tariffs aims to exert "maximum influence" on foreign governments.
In addition, according to a report by The Washington Post on April 7, two sources said that over the past weekend, Musk, head of the US "Department of Government Efficiency" (DOGE), directly appealed to Trump to revoke the new tariff policy. The report said that Musk's attempt ultimately failed. On April 7, Trump stated that he would not suspend the so-called "reciprocal tariff" policy.
After Trump's tariff policy severely hit the US stock market, Musk, who had always stood by Trump, finally "couldn't hold back" and began criticizing Peter Navarro (Peter Navarro), Trump's chief trade advisor and tariff supporter. On April 6, Navarro ignored Musk's criticism and even chose to counterattack during an interview with Fox News: "He’s just a car salesman."
According to reports by The Washington Post, the Financial Times, and other media on April 8, as increasingly worried about Trump's tariff policy leading to a market crash, more and more billionaires and financiers openly criticized and opposed the president's decision. This includes Trump's political "contributors."
The "sharpest" criticism came from Bill Ackman, a billionaire and well-known hedge fund manager in the United States who "defected" to support Trump in the 2024 US presidential election. He issued a lengthy warning last weekend, stating that continuing to impose new tariffs is tantamount to starting an "economic nuclear war."
This founder of Pershing Square Capital Management also warned that unless Trump "admits his mistake" before April 9 and halts the implementation of the reciprocal tariff before "causing a major disaster," the United States "will head toward an economically self-inflicted nuclear winter," and people must "prepare for an economic downturn."
"Business is a game of confidence. The president is losing the trust of global business leaders," Ackman added. "This will have extremely negative consequences for America and millions of citizens supporting the president, especially low-income consumers who are already under tremendous economic pressure. This is not the result we voted for."
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