US President Donald Trump has ordered his administration to consider imposing reciprocal tariffs on numerous trading partners, raising the prospect of a wider campaign against a global system he complains is tilted against the US.
The president on Thursday signed a measure directing the US trade representative and commerce secretary to propose new levies on a country-by-country basis in an effort to rebalance trade relations — a sweeping process that could take weeks or months to complete.
Howard Lutnick, Trump’s nominee to lead the commerce department, told reporters all studies should be completed by April 1 and that Trump could act immediately afterward.
Photo: Reuters
Fresh import taxes would be customized for each country, meant to offset not just their own levies on US goods, but also non-tariff barriers the nations impose in the form of unfair subsidies, regulations, value-added taxes, exchange rates, lax intellectual property protections and other factors that act to limit US trade, a copy of the memo distributed by the White House said.
“I’ve decided, for purposes of fairness, that I will charge a reciprocal tariff, meaning whatever countries charge the United States of America,” Trump said in the Oval Office. “In almost all cases, they’re charging us vastly more than we charge them, but those days are over.”
Trump told reporters that he would enact import taxes on cars, semiconductors and pharmaceuticals “over and above” the reciprocal tariffs at a later date.
Trump cited barriers in the EU, including VAT, as an example of what the US is looking to respond to. Trump has also singled out Japan and South Korea as nations that he believes are taking advantage of the US, and thus could be targeted in his latest push, a White House official who briefed reporters before the announcement said.
Reciprocal tariffs would amount to Trump’s broadest action to address US trade deficits and what he characterizes as unfair treatment of US exports around the globe. Trump has already imposed 10 percent tariffs on Chinese goods and plans to slap 25 percent duties on all US steel and aluminum imports next month.
Yet the president’s decision not to implement tariffs right away could be seen as an opening bid for negotiation — following the same strategy he has already used to extract concessions from Mexico, Canada and Colombia — rather than a sign he is committed to following through.
Traders saw the moves as a boost for risk assets, with the dollar retreating and stocks rising around the world. Speculation that negotiations would soften the tariffs, for now, eased fears of a full-blown trade war that would hurt growth and spur inflation.
“The goal is to have fair and reciprocal trade, and if we have that we will have jobs, high wages and high productivity,” Trump trade adviser Peter Navarro said on Thursday on Bloomberg Television.
The president is hoping to have a discussion with other nations about how existing policies have created an imbalanced trade environment, an official said, and he is more than happy to lower tariffs if countries want to pare their levies or remove other trade barriers.
“It’s a two-way street,” Lutnick told reporters after Trump signed the directive.
However, Trump said he did not expect to issue exemptions or waivers. He said that despite giving Apple Inc a pass on tariffs he imposed on China during his first term in order to compete with Samsung Electronics Co, this tariff package “applies to everybody across the board.”
Whatever happens, Trump’s brinkmanship has injected uncertainty into the global economy, with businesses and consumers waiting to see how Trump proceeds on a decision that could disrupt the US’ trade relationships with the rest of the world. The tariffs, if enacted, also risk driving up prices for US consumers on imported goods and exacerbating worries over inflation.
Navarro downplayed those worries on Thursday, saying the revenue raised from tariffs would be a “beautiful thing” and arguing that China-specific levies on certain key goods imposed during the first Trump administration had not meaningfully driven up prices.
“I would suggest to you that the tariffs we imposed on China were historic and large, and we had no problem at all with that,” Navarro said.
A study from the US International Trade Commission found that the costs of those tariffs were split between less-favorable margins for sellers and higher prices for downstream buyers.
SECURITY: As China is ‘reshaping’ Hong Kong’s population, Taiwan must raise the eligibility threshold for applications from Hong Kongers, Chiu Chui-cheng said When Hong Kong and Macau citizens apply for residency in Taiwan, it would be under a new category that includes a “national security observation period,” Mainland Affairs Council (MAC) Minister Chiu Chui-cheng (邱垂正) said yesterday. President William Lai (賴清德) on March 13 announced 17 strategies to counter China’s aggression toward Taiwan, including incorporating national security considerations into the review process for residency applications from Hong Kong and Macau citizens. The situation in Hong Kong is constantly changing, Chiu said to media yesterday on the sidelines of the Taipei Technology Run hosted by the Taipei Neihu Technology Park Development Association. With
A US Marine Corps regiment equipped with Naval Strike Missiles (NSM) is set to participate in the upcoming Balikatan 25 exercise in the Luzon Strait, marking the system’s first-ever deployment in the Philippines. US and Philippine officials have separately confirmed that the Navy Marine Expeditionary Ship Interdiction System (NMESIS) — the mobile launch platform for the Naval Strike Missile — would take part in the joint exercise. The missiles are being deployed to “a strategic first island chain chokepoint” in the waters between Taiwan proper and the Philippines, US-based Naval News reported. “The Luzon Strait and Bashi Channel represent a critical access
CARROT AND STICK: While unrelenting in its military threats, China attracted nearly 40,000 Taiwanese to over 400 business events last year Nearly 40,000 Taiwanese last year joined industry events in China, such as conferences and trade fairs, supported by the Chinese government, a study showed yesterday, as Beijing ramps up a charm offensive toward Taipei alongside military pressure. China has long taken a carrot-and-stick approach to Taiwan, threatening it with the prospect of military action while reaching out to those it believes are amenable to Beijing’s point of view. Taiwanese security officials are wary of what they see as Beijing’s influence campaigns to sway public opinion after Taipei and Beijing gradually resumed travel links halted by the COVID-19 pandemic, but the scale of
Pope Francis is be laid to rest on Saturday after lying in state for three days in St Peter’s Basilica, where the faithful are expected to flock to pay their respects to history’s first Latin American pontiff. The cardinals met yesterday in the Vatican’s synod hall to chart the next steps before a conclave begins to choose Francis’ successor, as condolences poured in from around the world. According to current norms, the conclave must begin between May 5 and 10. The cardinals set the funeral for Saturday at 10am in St Peter’s Square, to be celebrated by the dean of the College
RSS