Cutting Tariffs on Farm Equipment Is Another Admission That Trump’s Trade Policies Are Increasing Prices

President Donald Trump and some of his top advisers have routinely insisted that the administration’s new, higher tariffs would not burden American consumers because foreign governments or corporations would pay for those tax increases.

But with inflation rising and consumers (and voters) increasingly grumpy about the cost of living, the White House has turned to a telling strategy: cutting tariffs to make some products less expensive.

On Monday, the White House issued a presidential proclamation reducing tariffs on a wide range of agricultural and industrial equipment, including tractors, forklifts, and air conditioning equipment. Those imports will now be subject to a tariff of 15 percent rather than 25 percent, Trump announced.

The same announcement also rolls back one of the more insane aspects of Trump’s tariff regime: a rule implemented last year that would apply tariffs on raw steel and aluminum to imported products made from steel or aluminum. Under the new terms Trump announced on Monday, some “derivative” steel, aluminum, and copper products will be subject to a tariff of 10 percent instead of 25 percent.

Of course, the White House is not calling this a retreat or a necessary response to the entirely predictable consequences of its own policies. No, no. This is a move that will “more effectively address national security threats, spur investment in American agriculture, housing, and manufacturing, and facilitate U.S. production of related products,” according to the Trump administration.

In reality, this is yet another admission that tariffs are raising prices. In April, the Trump administration cut the tariffs on steel, aluminum, and copper imports from 50 percent to 25 percent. The president has also been quietly reducing or eliminating tariffs on agricultural products such as beef, coffee, and fruit.

The administration has also backed off from previously announced plans to raise tariffs. In January, a planned tariff hike on furniture, cabinets, and other lumber products was postponed and has seemingly been forgotten.

An optimist might look at this pattern of behavior and conclude that the Trump administration has realized the folly of its maximalist tariff strategy. After winning an election on the promise of lowering prices, the Trump administration’s signature second-term policy has been a series of deliberate and significant tax increases that are costing the average household thousands of dollars annually. Even in an administration that excels at crafting its own version of reality, that was eventually going to be a problem.

But I’m not sure I buy the sunniest interpretation here.

For one, if the administration were serious about providing tariff relief to Americans, why cut the tariffs on farm equipment and air conditioners from 25 percent to 15 percent? There are a lot of numbers lower than 15. That new tariff rate is just another arbitrary figure plucked out of thin air.

In fact, the new proclamation only serves to underline how ridiculous this entire exercise has become. Take this line as an example (emphasis mine):

I determine that it is appropriate to modify the threshold for imported products to qualify as made “entirely” from American aluminum, steel, or copper, as that term is used in Proclamation 11021. The current threshold of 95 percent shall be modified to 85 percent. In my judgment, this modification will incentivize increased use of American aluminum, steel, and copper in downstream derivative products.

The doublespeak is kind of astonishing. Trump is announcing a policy that lowers the threshold for what counts as an “American-made” metal product (so more goods can be imported without tariffs) while claiming this will incentivize more American-made production.

Cynically, I assume this is setting the stage for the White House to blast out some charts in a few months showing growth in “American-made” metal products, allegedly due to the tariffs—when in reality, all that’s changed is what products are being counted in that category.

More to the point: All this monkeying around with the tariff rates and import thresholds is only adding to the complexity and uncertainty that the White House has created. Some of the changes Trump announced on Monday are meant to “adjust” policies announced in “Proclamation 11021,” which was issued on April 2—just two months ago.

Given this administration’s track record, it seems likely that further adjustments will be made in the next few months. That makes it impossible for business owners to plan for the future. If you’d waited a few months, that new tractor might have only been taxed at 15 percent instead of 25 percent. If you can wait a little longer, maybe it will be taxed even less.

This all points back to why Congress, not the president, is supposed to be responsible for setting tariffs and trade policy. The deliberative legislative process would have prevented many of these tariffs—tariffs that the White House is now scrambling to roll back—from being implemented in the first place. And it would have provided some stability and certainty for businesses that currently have no idea what tariffs might be increased or reduced next week or the week after that.

Even as the White House backs away from its foolish tariff plans, the Trump administration keeps revealing why it should never have had these powers in the first place.