Trump administration officials are debating the merits of creating a new exporter tax credit, a move that offers an implicit acknowledgment of the harm that the White House's tariff policies risk inflicting on U.S. companies.
The rebate, which would be geared toward boosting U.S. manufacturers, would be issued at the end of the year to offset the effects of retaliatory tariffs as American companies seek to sell their goods in foreign markets, according to people familiar with the deliberations.
The credit, which would require congressional approval, could also apply to companies that export services abroad, said the people, who requested anonymity to discuss private talks.
Neither President Donald Trump nor Treasury Secretary Scott Bessent has been formally briefed on the plan, and the idea has divided the administration's economic team, they said.
The Treasury Department in a statement said, "while discussions on specific provisions are still early, all of Secretary Bessent's thinking on tax issues is backed by his full support for President Trump's America First Economic Agenda, and this will inform his ultimate support — or lack thereof — for any items that are proposed to him."
A representative for the White House did not respond to a request for comment.
The support for the tax credit is unclear. Still, the proposal is emblematic of the internal deliberations as some Trump allies are seeking to contain the fallout from his announcement last week to impose wide-ranging tariffs on nearly every country.
The exporter credit idea, which gained steam on Friday, signals that some of the president's economic advisors are unconvinced about the soundness of his trade policies.
Some U.S. trading partners have been quick to hit back on the levies, which have sent markets into one of the quickest slides since World War II.
China immediately hit U.S. goods with a 34% rate, matching the duty Trump announced last week. On Monday, he threatened to add an additional 50% levy on the world's second largest economy, suggesting a tit-for-tat trade war. European Union trade ministers met on Monday to discuss
The credit would serve as a subsidy to U.S. companies that sell overseas to help offset difficulties as retaliatory duties go into effect, the people said. However, it's U.S. importers that face the most immediate impact from Trump's new levies, because they will have to shoulder the burden of higher costs for goods they buy from trading partners.
Trump's economic advisors are also considering whether to design the credit to benefit importers as well, which would be more difficult to craft, the people said.
Trump has said his tariffs should spur more companies to manufacture their goods in the U.S. Economists and business leaders have warned it could take years to reconstruct supply lines and that the short-term effects of the levies could push the global economy into a recession.
