President Trump’s supply-side tax cuts are many times larger than reciprocal tariffs.

Mr. Trump may be softening his stance on tariffs.

A story in this morning’s Wall Street Journal front page drove up stocks 500 points. They eased back 100 points later. Only then Mr. Trump again suggested a softening at his Cabinet meeting, and that drove stocks back up to a 600-point gain for the day.

Is Mr. Trump negotiating with the stock market?

Or are more moderate voices holding sway inside the White House?

Everyone’s in favor of Mr. Trump’s reciprocity trade policy, including me.

You tax us, we’re going to tax you. Yet if you cut your tax on us, then we may be inclined to also reduce our tariff rate.

It’s a common-sense proposal, and, as I said, I’ve always supported it. The question is: how to implement it.

According to the Wall Street Journal, Mr. Trump may take a narrower approach that deals with countries’ average tariffs rate, rather than industry-specific tariffs.

Though he hasn’t fully ruled out specific product tariffs — such as autos, lumbers, and semiconductors — today the president reported that the European Union has lowered their tariffs on autos to only 2.5 percent, which matches our tariff… and that’s a very good thing indeed.

And it also should show Wall Street and everybody else that while tariffs may be his favorite word, reciprocity is his second favorite word, and a reciprocity approach could well mean many country tariffs come down.

Now here’s another thought.

Although many on Wall Street and the liberal press are obsessing about tariffs, spreading untruths that they will cause inflation or recession — the reality is, tariffs are a relatively small part of Mr. Trump’s overall economic growth plan.

Ace Washington policy watcher Dan Clifton initially estimated that Mr. Trump’s tariffs might come to about $250 billion.

Alright, now compare that to Trump tax cuts, which will come roughly to $4.5 trillion.

And don’t forget Mr. Trump’s tax cuts 2.0 plan to bring the “Made in America” production tax rate to only 15 percent, retroactive expensing of factories as well as machinery and equipment, plus new individual tax cuts such as no taxes on tips and overtime, and relief for seniors on Social Security benefits.

Throw all that in, and it could be worth hundreds of billions more in stimulus on top of extending Trump tax cuts 1.0.

Then, the deregulation program set to rollback President Biden’s regulatory assault could come to somewhere around $1.5 trillion of reduced costs.

So, when you look at the whole story, worst case is tariffs might come to a couple of hundred billion dollars, compared to overall stimulus and incentives from tax cuts and deregulation that could come to more than $5 trillion.

And, by the way, Mr. Trump has already gotten pledges by foreign and domestic investors that are now well past $3 trillion. In large part, because of his tax and deregulatory incentives.

So, people should stop obsessing about tariffs that might finally create a level playing field, which would be great for America.

Instead, they should realize that his overall plan may well create the biggest economic boom for blue-collar working folks and everybody else.

From Mr. Kudlow’s broadcast on Fox Business Network.