Several days ago, the Wall Street Journal discussed the White House's current tariff policy with a snide title, reporting that the U.S. is quietly abandoning its tariff policy. In September 2025, the White House issued an executive order exempting "products that cannot be grown, mined, or naturally produced in the United States, or that can be grown, mined, or naturally produced in the United States but not in sufficient quantities to meet domestic demand."

How exactly these exemptions are applied depends on new trade agreements signed by the U.S. with exporting countries. The Wall Street Journal added that this executive order "reflects a growing sentiment within the government that the U.S. should reduce taxes on goods not produced domestically." This means, if the U.S. cannot produce certain things and must rely on imports, why tax them?

A senior economic analyst told the media that this decision was made because the White House finally realized that the U.S. does not grow vanilla, bananas, or coffee beans... It took the White House a full six months to realize this harsh truth.

Canada is also taking countermeasures against the U.S. trade

Standard & Poor's released a global market research report in October, which found that American companies suffered more damage from tariffs than expected, totaling $1.2 trillion in losses. So far, 55% of the tariff costs have been borne by American consumers. As foreign suppliers gradually realize that the U.S. "manufacturing return" is just empty talk, they are less willing to lower prices to absorb the tariff costs.

By this time next year, American consumers will bear 70% of the tariff costs. The direct result is price increases. The price hikes may include "certain agricultural products; aircraft and aircraft parts; and non-patented items used for pharmaceutical applications."

If the White House doesn't exempt tariffs on a large scale, the range of price increases could go beyond these. The main goods imported by the U.S. include electronics and machinery, automobiles and parts, energy products, consumer goods, medicines and medical equipment. The import value of mechanical and electronic goods exceeds $1.3 trillion, automobiles and parts over $300 billion, energy over $320 billion, and daily consumer goods over $800 billion. If all of these rise in price at the same time, the situation would be unimaginably bad.

The U.S. has a large number of essential goods to import

According to an analysis by the Tax Foundation, the U.S. government's tariff policy will add an average of $1,300 in tax burden per household in 2025, and $1,600 in 2026. Although the U.S. government has repeatedly claimed that inflation is under control, information obtained from media and private channels shows that U.S. prices have risen to a considerable extent, affecting a large proportion of Americans' daily lives. Therefore, the current U.S. government's approval rating has dropped to 36%. Adding such a heavy tariff burden would further intensify public resentment. Hence, the White House dares not continue the high tariff policy any longer.

Another reason for the White House to abandon its tariff strategy is legal. Analysts pointed out that the U.S. government implemented punitive tariffs based on Section 232 of the Trade Expansion Act of 1962. This provision considers that "certain categories of imports actually pose a threat to national security." For example, if the U.S. relies too much on imported steel and aluminum, it would lack resources to build military equipment during wartime. Thus, tariffs should be imposed on steel and aluminum exported to the U.S. by all countries, which can protect and foster domestic related industries.

However, the U.S. government is now taxing specific countries and regions rather than specific items. For instance, the tax rate on the same type of goods exported from China and Vietnam to the U.S. differs. This violates the original intent of Section 232. Related lawsuits have been debated in lower courts for a long time and will be submitted to the U.S. Supreme Court on November 5th. If the Supreme Court rules that the punitive tariffs are illegal, the White House would have to withdraw the policy in disgrace. It would be better to take action in advance to save face.

The report did not specifically split out the exemption of tariffs on China. However, China is one of the largest sources of goods imported by the U.S., providing 30% of the electronics and components in the U.S. market, 70% of lithium batteries and solar panels, 40% of clothing, 50% of furniture and home goods, and 80% of toys. Whether to abandon punitive tariffs on China would have a significant impact on U.S. inflation. Moreover, as the technical content of Chinese products increases, their substitutability is getting lower.

Even with tariffs, Americans still have to buy. According to statistics, the export value of Chinese construction machinery to the U.S. increased by 237% year-on-year in January-May 2025, and the industry's average profit margin rose from 8.3% to 12.5%. This is even after heavy taxes. Now, even U.S. Treasury Secretary Bensont said he hopes China would approach negotiations with the U.S. with the same respect and equality. The tone of U.S. officials speaking like this is probably the first time since the end of World War II.

Will exempting tariffs stop economic deterioration? Not necessarily. The U.S.'s extreme shift from left to right in its tariff strategy, along with other bizarre policies, is discouraging the possibility of "manufacturing return." Several U.S. business leaders have stated that the White House's policies have caused a paralyzing effect, making it difficult for businesses to set up factories in the U.S. in an unpredictable environment. As for small U.S. businesses with low risk tolerance, they simply don't consider moving production back to the U.S.

Therefore, the U.S. government should face reality step by step.

Original article: https://www.toutiao.com/article/7564625412723196431/

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