Elon Musk against reciprocal tariffs? Will Donald Trump roll back US tariffs before 2026 midterm elections?

Will US President Donald Trump roll back or dilute his contentious reciprocal tariff policy? The businessman turned politician, who celebrated the US Liberation Day on April 2 by imposing tariffs ranging from 10% to 54% on friends and foes alike, has come under scathing attack and tremendous pressure. 

Elon Musk talks to Donald Trump?

If media reports are to be believed, a close aide and Department Of Government Efficiency head, Elon Musk, talked to Donald Trump directly and urged him to roll back the reciprocal tariff policy, but he failed to convince him. Later, the Tesla CEO took to social media and shared a video in which noted economist Milton Friedman is seen explaining how international trade benefits everybody.

In yet another example of trying to convince Trump indirectly, Elon Musk told Italy’s Deputy Prime Minister Matteo Salvini, "At the end of the day, I hope it’s agreed that both Europe and the United States should move, ideally, in my view, to a zero-tariff situation." Tesla CEO's desperation can be gauged by the fact that the EV manufacturer's stock plummeted more than 2.5% in Monday's bloodbath, closing at $233.29. 

Musk allies upset 

Some of the close allies of Elon Musk are upset with the imposition of the reciprocal tariffs; they have urged Vice President JD Vance to talk to Trump. Investor Joe Lonsdale, a longtime friend of Musk, said, "I argued to friends in the administration in recent days that tariffs would hurt American companies more than Chinese ones."

US economists oppose reciprocal tariffs

Economist Joseph E. Gagnon from the Peterson Institute for International Economics has said that there is no evidence linking deficits to foreign trade barriers, as countries with high barriers often have trade deficits. Echoing the sentiment, Robert Z. Lawrence from Harvard’s Kennedy School has termed the formula misleading. He said it assumes balanced bilateral trade is a fair standard; it is against the basic trade theory that deficits and surpluses vary by country.

Referring to liberalisation of President Ronald Reagan in the 1980s, Thomas Piketty, French author of the best-selling "Capital in the Twenty-First Century," said, "Trumpism is first of all a reaction to the failure of Reaganism."  Nobel Prize-winning economist Paul Krugman said that the US was the founder of the modern trade system that had led to lower tariffs over the past decades. Former Economy Minister of Lebanon Nasser Saidi said that "a major problem is an impact on the least-developed and emerging countries" from Trump's "seismic shock to the global trade landscape".

American Enterprise Institute points out errors

Drawing attention to the technical error while calculating the tariffs, the American Enterprise Institute said Trump administration's use of retail price elasticity (0.25) instead of import price elasticity (near 1) inflates perceived foreign tariffs fourfold.

Rollback before Mid-term elections 2026?

Analysts believe the Trump administration will have to retreat after some grandstanding because it will suffer the most and slip into a recession within a year. This may happen before the mid-term US elections of 2026, and coming under pressure from peers and the Republican lawmakers, Donald Trump may backtrack. He may dilute the provisions and claim partial victory, vehemently justifying his 'America First' policy.