Gavin Bade

They're putting the offer out there to other nations to say, if you do a deal with us, we can carve out more of these tariffs as well.

Yeah, so this is a subtle but important shift in the Trump administration's reciprocal tariffs.

These are the ones that he unveiled on Liberation Day back in April, then paused, then there were a bunch of negotiations.

He put them back in place in early August, right?

And so what he's done in the last few weeks here is he has increased the exemptions or the carve-outs from these tariffs for a few dozen products.

They've also given indications that they're going to do more in the future.

There was an executive order in September where Trump said, not only am I exempting more products from these tariffs, but I'm going to lay out an entire list of hundreds of products that I'm going to say are available for exemptions if we make a trade deal with another country.

They're putting the offer out there to other nations to say, if you do a deal with us, we can carve out more of these tariffs as well.

There's a few reasons for this.

One of them is the reciprocal tariffs are under legal threat.

This is based on a very novel interpretation of emergency national security law.

The Supreme Court is going to hear a case on this early next month.

They're expanding this other tranche of tariffs, the so-called Section 232, the more classic national security tariffs.

They're a much firmer ground, legally speaking.

This is what you see as tariffs on steel, aluminum, automobiles.

And really what we're tracking here is they are shifting the emphasis away from the reciprocal tariffs somewhat and toward the Section 232 national security tariffs.

It's still going to be a lot of uncertainty here, right?

In the first term tariffs and the tariffs on China, there was an official exemptions process.

So any business could apply to the U.S.

Trade Representative's office and say, hey, I get this component from China.