Trump floats possible exceptions to 10% baseline tariff

President Donald Trump said he could offer some exemptions to his 10% tariff on most US trading partners - even as he insisted that it was "pretty close" to a floor for nations seeking to negotiate trade deals.

"There could be a couple of exceptions for obvious reasons but I would say 10% is a floor," Trump told reporters on Friday evening aboard Air Force One en route to Florida. He didn't say what the "obvious reasons" were, and didn't indicate any new shift in his tariff agenda. 

Trump's comments capped a tumultuous week for equity and bond markets and threaten to inject more uncertainty for countries, investors and businesses grappling with his trade policies. The president this week put in place sweeping higher tariffs on dozens of nations — only to delay those levies hours later after seeing financial markets convulse as worries intensified that Trump's import taxes could devastate the global economy.

While China, the world's second-largest economy is facing a 145% levy, Trump is keeping his baseline 10% rate for most countries as foreign governments rush to secure deals with the administration.

Friday saw stocks erase their losses and notch their best week since 2023. The S&P 500 jumped 1.8% on a report that a Federal Reserve official said the central bank was ready to help stabilize markets, if needed. US 10-year yields came well off Friday's highs, but saw their biggest weekly surge in more than two decades.

The volatility of recent days, however, shows no signs of easing with fears Trump's campaign to use tariffs to bring manufacturing jobs back to the US and provide the federal government with more revenue will tip economies into recession and threaten the US' status as the world's safe haven. 

Trump on Friday downplayed that turmoil, saying: "I think the markets were solid today. I think people are seeing we're in great shape," he said. And he insisted that the US dollar would "always" remain "the currency of choice."

"If a nation said we're not going to be on the dollar, I would tell you that within about one phone call they would be back on the dollar. You always have to keep the dollar," he added.

Trump also shrugged off fluctuations in US Treasuries, which he indicated this week were a factor in his shift on tariff policy. "The bond market's going good. It had a little moment but I solved that problem very quickly," he said.

Still, even with temporary relief for other trading partners, the high tariff rate on China will drive up the average US duty rate to historic levels, according to Bloomberg Economics. The drawn-out trade clash between the world's two largest economies threatens $690 billion in trade. 

Beijing on Friday raised tariffs on all US goods to 125%, mirroring a move by the White House that pushed duties on Chinese imports to the same level, on top of an existing 20% tax. China said it would not match any further hikes, but reiterated its vow to "fight to the end" with other - unspecified - countermeasures. 

"I think something positive is going to come" Trump told reporters Friday  when asked about the trade fight with China, calling his counterpart Chinese President Xi Jinping "a very good leader, a very smart leader."