The report: In an effort to ease rising tensions with Beijing, the Trump administration is reportedly weighing a cut to its current sky-high tariffs—bringing them down to a still-punishing range of 50% to 65%, per The Wall Street Journal.

While no final decision has been made, officials are also weighing a tiered structure: a 35% tariff on non-strategic goods and a phased-in rate of at least 100% on imports deemed critical to national security. Those duties would be phased in over a five-year period.

The broader perspective: Pressure from major retailers like Walmart, Target, and Home Depot has reportedly played a role in the administration’s shifting stance, with executives warning that current tariffs could lead to price spikes and product shortages.

But while the shift, if it happens, would mark a slight retreat from the administration’s most aggressive posture, it’s worth noting how far the Overton window has moved both in terms of the share of goods subject to tariffs and steepness of those tariffs. The baseline for what’s considered “normal” trade policy has changed dramatically.

• In February 2018, only 0.2% of Chinese goods—mainly solar panels and washing machines—faced US tariffs, per the Peterson Institute for International Economics.
• By September 2019, during the first Trump term, that figure jumped to 66.6%.
• As of February this year, all Chinese imports are subject to tariffs, with the average rate ballooning from 2.2% in early 2018 to a staggering 134.7% today.

Even a rollback to 50% or 35% would still be a crushing burden for many retailers, making it difficult—if not impossible—to profitably import and sell a wide range of products.

Our take: The opaque and shifting nature of the Trump administration’s trade strategy—whether the goal is to drive reshoring, raise revenues, or penalize China over issues like drug trafficking—has created a volatile planning environment.

For retailers, the lack of clarity makes medium- and long-term decision-making nearly impossible. In an industry that depends on predictable costs and supply chains, the current tariff regime continues to be a destabilizing force, particularly at a time when merchants need to be thinking about the holiday season.

Go further: Read our report, Impact of Tariffs on US Businesses.