Brad Setser

The FT's reporting confirms all suspicions -- and March will match February in all probability as the incentive to front run April 2 is clear 2/ https://www.ft.com/content/d39...

And since it now seems (based on Bloomberg's latest reporting) that April 2 ("Liberation day") will only see the rollout of reciprocal tariffs not the sectoral tariffs (232s) that have been teased (including by Trump) 3/ https://www.bloomberg.com/news...

The fact that Trump is more hawkish on tariffs than most of his advisors only adds to the incentive to ship as much as possible to the US now -- as it is hard to imagine that the sectoral tariffs won't eventually take effect in some form 4/

As an aside, targeting all countries with trade barriers/ and or a trade surplus with the US will produce some strange results -- "Only countries that don’t have tariffs on the US, and with whom the US has a trade surplus, will not be tariffed" 5/

Korea and Canada don't have significant trade barriers to US industrial exports, as both have FTAs with the US. But Korea runs a large surplus with the US and it is hard to see how Trump doesn't tariff Canada even tho Canada runs a deficit with the US if oil is excluded 6/

the US generally runs surpluses with both Australia and Brazil, as both use some of the proceeds from the large iron exports to china to buy US goods ... 7/

The US has a free trade agreement with Australia, so it presumably won't be on the "reciprocal" list now being drawn up by Trump's advisors -- but Brazil has large tariffs and presumably will be on the list ... 8/

And if the tariffs are significant, trade will evolve dynamically and countries that don't now have a surplus and avoid tariffs may soon have a surplus (am thinking of say the UK ... which is an obvious workaround for tariffs on the EU ) 9/

I understand the desire not to impose too big a shock -- which presumably is why parts of the White House (the NEC I assume) are signalling that not all the tariffs will be additive and that some of the "IEEPA" tariffs could be replaced by reciprocal tariffs ... 10/

But the Bloomberg story also suggests a prolonged period of uncertainty, as the sectoral tariffs (232s) won't be part of the announcement, & presumably the China 301 review will also continue. Among other things, that implies more frontrunning 11/11 https://www.bloomberg.com/news...