With markets in turmoil thanks to Commerce Secretary Howard Lutnick's bull-in-a-china-shop tariff math, senior officials in the Trump administration are quietly debating the creation of a new exporter tax credit, a move that signals growing internal concern over the economic costs of the White House’s sweeping tariff policies.
According to Bloomberg, the rebate - which is still in early stages of discussion, would be aimed at supporting U.S. manufacturers by offsetting the burden of retaliatory tariffs imposed by trading partners. The credit would be issued at year’s end and could also extend to U.S. firms that export services abroad, according to people familiar with the deliberations who spoke on the condition of anonymity to discuss private talks.
That said - the proposal has yet to be formally presented to President Trump or Treasury Secretary Scott Bessent, and it has sharply divided members of the administration’s economic team, those people said.
While support for the tax credit remains uncertain, its emergence reflects the broader tension within the administration over the fallout from President Trump’s aggressive trade posture. The president last week announced plans to impose sweeping tariffs on nearly every country - a move that sparked swift retaliatory measures from global trading partners and sent financial markets into one of their sharpest downturns since World War II.
In response, China matched Trump’s new tariff levels with a 34% duty on U.S. goods - while on Monday, Trump threatened an additional 50% levy on Chinese exports. European Union trade ministers convened the same day to discuss their own retaliation strategies.
The proposed exporter credit is seen by some in the administration as a way to cushion the impact on U.S. companies now facing steeper barriers abroad. It would function as a subsidy to help manufacturers and service providers weather foreign retaliation. But the economic pain has not been confined to exporters. U.S. importers are bearing the brunt of the new tariffs, absorbing higher costs for goods they rely on from global suppliers.
Some advisers are exploring whether the credit could be extended to help importers as well - an idea that would be more complex to implement, according to people briefed on the discussions.
The deliberations are notable for what they imply: that even within the administration, confidence in the tariff strategy is not absolute. The credit proposal “offers an implicit acknowledgment” of the damage tariffs could inflict on American firms, one person familiar with the talks said.
Trump has argued that his tariffs will spur more companies to relocate manufacturing back to the United States. But economists and business leaders have warned that restructuring supply chains is a long-term undertaking, and that the short-term impact of the levies could push the global economy toward recession.
