Trump Stands Pat on Tariffs Even as New Trade Pacts Loom

On May 9, 2025, President Donald Trump declared that the US would maintain a universal 10% tariff on imports, even as new trade agreements with other nations take shape, signaling a steadfast protectionist stance. While anticipating more trade deals in the coming weeks, Trump emphasized that exemptions would only apply if trading partners offer favorable terms, ensuring a baseline tariff of 10%. This approach, blending trade negotiations with tariff rigidity, underscores Trump’s strategy to prioritize US economic leverage, impacting global markets and trade dynamics. This report examines Trump’s tariff policy, its implications for upcoming deals, and the market’s response.

Trump’s announcement reaffirms his commitment to tariffs as a cornerstone of US trade policy, even amidst progress on international agreements like the recent US-UK pact, which generates $6 billion in revenue and $5 billion in export opportunities. The 10% tariff baseline, applied universally, aims to protect domestic industries, with exemptions reserved for nations offering significant concessions, such as reduced non-tariff barriers or enhanced market access for US goods like beef and ethanol. Trump’s promise of new deals in the near future, potentially including China following talks on May 10-11 in Switzerland, keeps markets hopeful, yet the tariff stance tempers expectations for broad relief.

The US Dollar dipped to 100.29 on the DXY, down from 100.64, as equity markets surged, with the Dow Jones up 1.6% to 41,113 and the S&P 500 gaining 0.2% to 5,617, reflecting a risk-on mood despite tariff uncertainties. Gold held steady at $3,311, supported by central bank buying and geopolitical tensions, while the Dollar’s technical support at 99.83 and resistance at 100.23 suggest a cautious market. The Federal Reserve’s recent rate hold at 4.25%-4.50%, amid inflation at 2.6% and a solid labor market (April’s 177,000 Nonfarm Payrolls, 4.2% unemployment), aligns with Trump’s tariff policy, prioritizing economic stability over immediate easing.

Trump’s tariff strategy, paired with his push for new trade agreements, creates a dual narrative of protectionism and opportunity, shaping global trade expectations. The upcoming US-China talks, addressing tariffs capped at 145%, and potential deals with other nations will test Trump’s approach, as markets weigh the balance between tariff burdens and trade gains. With equities buoyant and the Dollar resilient, the economic landscape remains dynamic, driven by Trump’s unwavering tariff commitment and the promise of expanded trade horizons.