Gradual tariff proposal fits with previous Trump strategy

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Stock futures rose this morning before the open — a move analysts largely attribute to reports that the Trump administration will opt for a gradual approach to tariff increases. 

Even though a better-than-expected PPI report on Tuesday helped boost equities early in the session, the SP 500 and Nasdaq Composite indexes quickly gave back these early gains. 

But let’s rewind to the conversation on tariffs . Bloomberg after the close yesterday reported that Trump’s team is considering ramping up tariffs at a slower pace than many initially thought, potentially by 2% to 5% increases per month. Ideally, the strategy would allow for negotiations and prevent rapidly rising prices. 

The vision aligns pretty perfectly with what Stephen Miran, Trump’s pick to lead his Council of Economic Advisors, told us on the Forward Guidance podcast a couple months ago. 

Back during Trump 1.0 (2018-2019), Miran pointed out, the proposed 25% tariffs on Chinese imports did not come in one fell swoop. The actual ~17% effective rate increase we did implement on China was spread out over 12 months. 

“The after-tariff dollar-import price of goods coming from China was practically unchanged,” Miran said on the episode. 

On the campaign trail, Trump proposed a minimum 10% to 20% tariff on all imports, and a 60% minimum rate on those coming from China. 

“In going to 60% tariffs on China or 10% globally, [a gradual] approach becomes even more important,” Miran wrote in a November 2024 paper on the global trade system.

If history repeats, we could see similar trade policies come down the line — which are likely to ease investor concern and boost equities.

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