White House aides have drafted a proposal to impose tariffs of about 20 percent on most imports to the United States, three people familiar with the matter said, as President Donald Trump pushes for the most aggressive overhaul of the global economic system in decades.
If implemented, the plan is likely to send shock waves through the stock market and global economy. Assuming that permanent tariffs took effect in the current quarter and triggered robust retaliation by U.S. trading partners, the economy would almost immediately tumble into a recession that would last for more than a year, sending the jobless rate above 7 percent, according to Mark Zandi, chief economist for Moody’s, who described the results as a worst-case scenario.
White House advisers cautioned that several options are on the table and no final decision has been made. On Monday evening, Trump repeatedly suggested the tariffs would be “reciprocal” — in direct proportion to those levied by foreign countries on U.S. exports — and indicated that many countries would not be included in the import duties. That would probably represent a less drastic action than a single universal tariff.
The administration has for weeks been involved in extensive planning to announce new tariffs on Wednesday, which the president has dubbed “Liberation Day.” White House officials have scoffed at economists’ warnings, arguing that similar downbeat forecasts proved wrong when Trump imposed more modest tariffs during his first term. Administration officials insist the tariffs are needed to rebalance a global trading system that has discriminated against the U.S. for decades, making a hollow shell out of factory communities across the nation.
“The president will be announcing a tariff plan that will roll back the unfair trade practices that have been ripping off this country for decades. He’s doing this in the best interest of the American worker,” White House press secretary Karoline Leavitt told reporters Monday.
The tariffs will take effect “immediately,” Leavitt said Tuesday.
While it remains unclear precisely what tariffs Trump will approve, the scale of the tariffs being contemplated reflects the president’s ambitions to remake the global economic order.
One option would raise import duties on products from virtually every country, rejecting more targeted approaches that have been publicly outlined in recent days by some of Trump’s senior advisers. The administration cites as its legal justification the 1977 International Emergency Economic Powers Act, which grants the president broad powers to regulate international transactions, the people said.
One person familiar with the administration’s thinking said the White House believes that, combined with additional tariffs on sectors such as automobile and pharmaceutical imports, the tariff plan would raise more than $6 trillion in new federal revenue and amount to the biggest tax hike in decades.
Administration officials are also discussing using this revenue to finance a tax rebate or dividend payment to most Americans, but planning around such a measure is highly preliminary, the people said.
The White House is also still considering an order that would apply a different tariff rate to individual countries, the people said. Trump on Monday appeared to return to this approach, saying: “Whatever they charge us, we’ll charge them.”
A White House spokesman declined to comment for this story.
The people familiar with the matter stressed that Trump could always change his mind, but the president has pushed for the universal tariff in recent days and sees it as simpler than country-specific measures. They spoke on the condition of anonymity because they were not authorized to speak.
“You’d start with all countries,” Trump told reporters on Air Force One.
Trump appeared to suggest on Sunday that he was considering a tariff measure that would apply to every country, although he also said last week that he would be “lenient.”
Leavitt declined to share details about Wednesday’s announcement, scheduled to be unveiled in a Rose Garden ceremony, but when asked whether farmers would be affected she said: “No exemptions at this time.”
Wilbur Ross, who served as commerce secretary during Trump’s first term, said the White House is considering setting one flat rate on imports of between 15 percent and 25 percent. He said administration officials are wrestling with the complicated question of how to change existing tariffs on countries that are higher or lower than that amount to align with the new target. Ross said there is also discussion of exempting “some things we don’t make in the U.S. anymore,” citing certain wood products as an example, adding that it “would not make much difference in terms of the overall picture.”
While Treasury Secretary Scott Bessent had floated a tariff number for each country, administration officials are wary that doing so would create incentives to circumvent tariffs by first shipping goods to countries that have lower import duties. Ross acknowledged disagreements among Trump’s senior team, saying “there are some people in the White House who are undoubtedly more extreme” on tariffs than Bessent or Commerce Secretary Howard Lutnick. Still, he said there would be no dissent once Trump makes his decision, in contrast with the objections from Cabinet secretaries that marked his first administration.
“At the end of the day, this time, unlike last time, it’s ultimately Trump’s decision to make and everyone will fall in line with his decision,” said Ross, who dined at the president’s Mar-a-Lago compound on Friday with Trump, first lady Melania Trump, Bessent, Lutnick and several other administration figures. “The most important thing is to get it done, get it announced, and have it be a sensible and understandable thing. Because there’s been quite a bit of market disruption due to what I call fear of the unknown.”
Trump has also called for sector-specific tariffs that would be higher than the flat rate, including on automobiles, copper, pharmaceuticals and lumber. The timing of those announcements and precise rates remains unclear.
Even before their announcement, Trump’s tariffs have made a mark on the economy and financial markets while denting his public approval ratings. Consumers’ expectations of the economic future fell in March to a 12-year low, according to the Conference Board. The S&P 500 index has lost 8 percent of its value since Trump first spoke of his “reciprocal” tariff plan in mid-February.
“What we have seen over the past several weeks is a greater focus on downside growth risks,” said Matthew Luzzetti, chief U.S. economist for Deutsche Bank in New York.
In an AP-NORC poll released Monday, 38 percent of respondents approved of the president’s handling of trade with other countries and 60 percent disapproved. The results came from a survey of 1,229 adults conducted March 20 to 24.
Some trade skeptics have pushed for Trump to revive the tariff on all imports that he campaigned on in 2024. Nick Iacovella, executive vice president of the Coalition for a Prosperous America, said in a statement that a “permanent, universal tariff will not only raise revenue and reset the global trade environment, but it will also provide the long-term certainty and stability needed to rebuild American industry, protect our economic security, and truly achieve President Trump’s trade and tariff agenda.”
But it’s difficult to overstate mainstream economists’ opposition to the president’s plan. Greg Mankiw, an economics professor at Harvard University and the author of a widely used economics textbook, said “the benefits of an open world trading system and the adverse effects of tariffs” are among the few subjects that enjoy an overwhelming consensus among economists.
“Trump doesn’t seem to understand basic international economics. A lot of the arguments he makes, Adam Smith was refuting two and a half centuries ago in ‘Wealth of Nations,’” he added. “I have not seen a more wrongheaded policy come out of a White House in decades.”
As Trump’s April 2 announcement drew near, Wall Street investment banks began marking down their economic forecasts. Assuming that Trump imposes new tariffs of 15 percent, the economy will slow to an annual rate of just 1 percent by year’s end, according to Goldman Sachs, which sees a greater than 1-in-3 chance of a recession in the next year.
“The risk from April 2 tariffs is greater than many market participants have previously assumed,” the bank’s economists said in a client note Sunday.
Most forecasters expect comprehensive tariffs to slow the economy while raising the unemployment and inflation rates. Like Moody’s, EY-Parthenon says 20 percent universal tariffs would produce a recession.
Zandi of Moody’s sees unemployment peaking at 7.3 percent in early 2027 and remaining near 6 percent through 2028. Stocks would lose one-quarter of their value, and more than 5 million jobs would be lost by early 2027, said Zandi, who described the results as a worst-case scenario.
By raising prices, tariffs would disproportionately hit lower-income consumers and businesses that rely on imported components. Profits and productivity would slide.
“I’d brace for impact,” Zandi said.
