U.S. still looking at 10% baseline tariff, not higher, Lutnick says
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Commerce Secretary Howard Lutnick. Photo: Win McNamee/Getty Images
The U.S. still intends to put a baseline tariff of 10% on many smaller countries, despite recent suggestions it could go higher, Commerce Secretary Howard Lutnick said Sunday.
Why it matters: It's a small sign of relief for the market, which has watched nervously as President Trump repeatedly suggested in recent days that baseline rates could go to 15% or even 20%.
Catch up quick: Earlier this month, Trump sent letters to dozens of countries, unilaterally setting tariff rates as of August 1. Hundreds more are expected in the coming days.
- So far, only one of those countries, Indonesia, has made a nominal deal for a better rate than the letter imposed, though it's not clear if that arrangement is anywhere close to finalized.
- The Yale Budget Lab estimates that Americans — including the impact of the August 1 letters — now face the highest tariff rate since 1910, an average cost of $2,800 per household this year.
What they're saying: "You should assume that the small countries, the Latin American countries, the Caribbean countries, many countries in Africa, they will have a baseline tariff of 10%," Lutnick said on CBS's "Face the Nation" Sunday.
- "The bigger economies will either open themselves up or they'll pay a fair tariff to America," he said.
Zoom out: Lutnick said August 1 was a hard deadline, and that no nation was going to "negotiate away" tariffs entirely.
- "10% is definitely going to stay. Many countries will pay higher," he said.
The intrigue: CBS released a new poll Sunday morning showing 60% of respondents oppose tariffs, and 61% believe the administration is putting too much emphasis on tariffs.
- Lutnick dismissed the finding."They're going to love the deals that President Trump and I are doing. They're just going to love them," he said.
- He also dismissed any concerns about tariffs causing prices to rise. "I think you're going to see inflation stay right where it is," he said.
- The recent CPI report showed inflation has been creeping steadily higher in recent months, including in the goods categories most exposed to tariffs.
What to watch: With 12 days to go until the deadline, a number of countries and blocs, like Japan, South Korea, and the European Union, are actively negotiating with U.S. officials to lock in lower rates.
