The line fell silent.
In a phone call from the Oval Office, President Trump had just delivered unwanted news to three of America's most powerful car -executives: Mary Barra by General Motors, John Elkann from Stellantis and Jim Farley from Ford.
Everyone has to hold, said Mr. Trump during the call, which took place at the beginning of March. Rates will take effect on April 2. It's time for everyone to board.
Just like the leaders of other industries, the car heads had claimed that Mr. Trump's 25 percent rates on cars from Canada and Mexico would cause their supply chains and blow a hole through their industry. They had won a kind of concession when Mr. Trump agreed to give them a postponement of a month until 2 April.
But now the Big Three Automaker Chiefs seemed to realize that it didn't make sense to fight for more. They would have received as much as they would get.
For the American business community, including some large donors, the shock of Mr Trump's second term is that it appears that he really believes what he has been saying publicly for 40 years: America is tearing off and rates are a silver bullet for the problems of America. If he says that “rate” is the best word in the dictionary, he means it.
For Mr. Trump, rates are not just a negotiating instrument. He believes they will make America rich again. And they combine two of his favorite characteristics of the presidency: they are a unilateral power that he can put on a whim in or off, and they create a begging economy, making powerful people to pleading for grace.
This account is based on interviews with more than a dozen Trump officials and others who are familiar with the dynamics in the White House through rates. They asked for anonymity to discuss private conversations and deliberations.
In the business community – a group that spends a fortants in consultants to interpret Mr Trump, and where the cliché of him is “serious but not literally” in a high circulation – many clinged to the opinion that he only saw rates as an aid for leverage. It wasn't that Mr. Trump loved rates, they said to themselves. It was that he loved what the threat of them could result in a negotiation.
Over the years it had become the conventional wisdom that the stock market was the leading light and crash barrier of Mr. Trump, and that every dive in the markets would limit the scope of his rates, which were applied more surgically seven years ago.
But Trump 47 has not been put off so far by a Kelmmarkt and by headlines that Trump 45 would have forced in reverse. The industrial average of Dow Jones has been shaved more than 600 points since the new rates started. The S&P 500 slid into a correction, which means that it has fallen by more than 10 percent of its peak.
During his first term, Mr. Trump a weaker stomach for economic pain caused by a much narrower rates program. He placed rates on more than $ 300 billion in products during his first term; Now, less than two months later, he has set rates on around $ 1 trillion goods.
A few recent public opinion polls show that a growing number of Americans rejects Mr Trump's economy, but his advisers insist that this is more about persistent high prices than rates.
One of Mr. Trump's advisers, who talk about the condition of anonymity to describe private conversations, said that the Biden Presidium proved Mr. Trump that the stock market is not a watertight barometer of the future of the economy, nor a useful indicator of kiezerson's. If that was the case, Mr Biden, who provides a thriving stock market, would certainly be the president, said the adviser, who explained Mr. Trump's thinking.
Advisors say that Mr. Trump knows that foreign leaders are looking to see if he is following his threats, looking for signs of weakness. They said that he believes that the withdrawal of his rates would permanently damage his preferred image as a strong man.
Sometimes he has granted a sort of absolution – as when he is exempt from rates from Canada and Mexico who comply with his North – American trade agreement. But he has repeatedly said that there are more and larger rates on the road.
Managers now quickly assess the cheerful assumptions that their thinking has led since the election day.
Bill Reinsch, senior adviser at the Center for Strategic and International Studies and a former departmental department, said that Mr Trump had been explicitly in the campaign about his intentions, and that his tariff proposals were much deeper and wider this time than in his first term.
“I think he was clear,” he said. “I don't think people have paid a lot of attention.”
Their wrong reading is understandable.
In the run -up to the 2024 elections, Mr. Trump's new harvest sent reassuring signals to Wall Street. Their public comments suggested that Mr. Trump's trade policy would be about the same as the first. In September Howard Lutnick, now the secretary of the trade, described rates as a “negotiating ship” that would eventually lead to freer markets. And Scott Bessent, who the Minister of Finance of Mr. Last year, Trump wrote in a letter to his customers that “the rate rifle will always be loaded and rarely discharged on the table.”
It is still possible that Mr. Trump withdraws from some of his rates, but if he is considering a reversal, the news would be for his closest advisers. Mr. Trump repeatedly said that he is planning to perform much more extensive rates on 2 April, and his advisers have told foreign officials and chief executives that he will not be deterred. His comments on his cabinet secretaries and assistants in Oval Office meetings follow his public rhetoric, according to two people with direct knowledge, who spoke about the condition of anonymity to describe private conversations.
Mr. Trump adjusts or dictates his truth of social posts that always take escalating rates such as China, Canada and the European Union revenge against his provocations. Even former assistants who think that his maximalistic approach is the wrong one, say that he has a valid point about how China and Europe have treated the United States unfairly when it comes to trade.
He believes that the pressure has worked so far, say assistants, referring to the willingness of Mexico to steal the flow of migrants without papers and fentanyl in the United States. Even after Mexico emerged with those measures, Mr. Trump still pushed ahead with 25 percent rates before they paused their application on a number of items.
One of the biggest differences between the first term and now is that Mr Trump has much more confidence in his instincts and his team has filled with people who reflect them. He rarely hears strong deviating views on his economic policy.
In his first term, Mr. Trump received severe opposition against rates from those who said they would increase the costs for consumers and companies and slow down the economy. His team included people, Mr Trump would mockingly call “globalists” – such as Steven Mnuchin, the minister of Finance, and the economic adviser Gary Cohn, who collaborated with others to stop rates by taking papers from the president's office and showed the presidential cards and cards to the benefits of the trade. Other assistants, such as Larry Kudlow, were less confronting, but still skeptical about a protectionist trade policy.
Mr. Trump's hard trade consultant, Peter Navarro, used to have Oval Office group matches against the so-called Globalists. Now, to return for a second term, Mr Navarro's disputes are more nuanced.
Mr. Bessent was a hedge fund director and Mr. Lutnick was the Chief Executive of the Wall Street company Cantor Fitzgerald. But both have publicly embraced rates before they got their jobs. And whatever they think about the rates Privé, nobody is opposed to Mr Trump's determined agency and fights strong against his economic ideas. The arguments of his current team revolve around public messages about the rates, as well as exemptions and the scale and timing of the rates, but nobody challenges the idea of using them in some form.
Nor hear Mr. Trump a strong abnormal opinion of Capitol Hill. Republican legislators are converts to protectionism or koers to speak out. The Wall Street Journal Editorial Board is the rare law leaning institution that still consistently disputes his approach to trade.
Mr Lutnick, who also supervises the American Handelsbureau, receives many calls from unfortunate managers, together with the Staff Chef of the White House, Susie Wiles, and the agricultural secretary, Brooke Rollins.
In the night of March 13, Mr. Lutnick, Mr Bessent, Kevin Hassett, who is the director of the National Economic Council, and a few others met in the Naval Observatory with vice -president JD Vance to discuss a coherent public message about the economy, in the midst of the highlights of allies.
Civil servants of the White House refused to comment on the meeting.
But in a statement from the White House, Mr Navarro described Mr. Trump's advisors as following his leadership and characterized them as 'a diverse group with complementary skills and a high level of trust with names such as Bessent, Greer, Hassett and Lutnick who debate behind closed doors and stand up as' one band, one sound. “”
Few exceptions have been granted. Mrs. Rollins heard from farmers who wanted an exemption for Potas, an important ingredient for fertilizer. Mr. Trump finally agreed with a reduced rate of 10 percent, but was unhappy about the delay, according to a person with knowledge of the case. In a statement, Mrs. Rollins said that “reducing Potas's rates of the president is a crucial step to help farmers manage and obtain the most important input costs at the peak of the planting season, while strengthening long -term trade relations on agriculture.”
But in many other cases, Mr Trump seemed to be much less willing to offer significant industrial exemptions than he was in his first term.
Although some industrial managers have tried to push back during discussions with the White House, few have said something publicly; Those who have earned the anger of the Trump government. Those who have spoken privately have generally clamped every criticism of Mr Trump between lush praise.
Some companies are “intimidated” about reducing rates, wary of becoming a kind of target, said Mr. Reinsch. “Nobody wants to become public,” he said, “because they are worried about the consequences.”
But those companies are still counting on policy that they favor, such as tax cuts and deregulation.
