The Trump team is studying using emergency powers to gradually increase tariffs by 2-5% each month.

According to informed sources, the new economic team members of President-elect Trump are discussing a gradual increase in tariffs on a monthly basis. This gradual approach aims to increase negotiation leverage while helping to avoid skyrocketing inflation. Sources say one idea is to create a progressive tariff plan, increasing by approximately 2% to 5% each month, relying on executive powers under the International Emergency Economic Powers Act. The proposal is still in the early stages and has not been presented to Trump, indicating that the monthly phased increase in tariffs is still in the early stages of the deliberation process. Sources say advisers involved in the plan include Treasury Secretary nominee Scott Bennett, incoming Chairman of the National Economic Council Kevin Hassett, and nominated head of the Council of Economic Advisers Stephen Milan. A spokesperson for Trump's transition team mentioned his public comments and social media posts about tariffs before becoming president. Unified Tariffs During the 2024 presidential campaign, Trump stated he would impose a minimum tariff of 10% to 20% on all imported goods, and 60% or higher on goods from China. Since winning the election in November, there have been several reports on how actively he would implement tariffs Trump himself referred to one report as false. This uncertainty has left investors and businesses guessing. Earlier on Monday, the S&P 500 index fell below the closing price of November 5, later rebounding. Investors have been selling US Treasury bonds recently, as concerns over inflation persist due to new tariffs, creating resistance for the stock market and the overall economy. With only a week left until the inauguration, economists can only speculate on how Trump's trade war will impact the economy. This has left the Federal Reserve with a complex situation, as Trump's tariff threats are seen as a risk to growth prospects, potentially triggering inflation if retaliatory actions are taken by other countries. International Monetary Fund Managing Director Georgieva stated that tariff threats have raised global long-term borrowing costs. Speaking to reporters in Washington on Friday, she said the uncertainty of the new government's trade policy has exacerbated global economic headwinds, and is "actually showing up in terms of higher global long-term rates". She noted that even though short-term rates have decreased, this unusual combination is still occurring.