In a major development that may upset world trade, Donald Trump has revealed a new policy to impose “reciprocal” tariffs on nations with which America runs trade deficits. The plan, proposed on Thursday, aims for a variety of nations, both allies and competitors, such as Brazil, India, Japan, Canada, and the European Union (EU), all of which may see their tariffs increase in reprisal for what is in the administration’s view unfair trade practice.
Trump made the move after a long-held complaint against nations that charge American products higher tariffs than the U.S. charges theirs. With a forceful statement, Trump announced that America would begin taxing American exports on the same terms. “In nearly all cases, they’re charging us vastly more than we’re charging them, but those days are over,” he explained.
The proposal would go into effect as early as April 2. The White House will examine nations with the biggest trade deficits with the U.S., including China and Mexico. Trump reiterated that the action is meant to bring about fairness in international trade, reacting to practices like subsidies and regulations that the U.S. feels hurt its economic interests.
Trump’s plan comes amidst large-scale geopolitical transitions, as President Trump also courted headlines earlier with his campaign to bring about an end to the current conflict in Ukraine. In his last week’s words, he urged a realignment of global groupings, so much so that he even requested Russia to get back into the G7 forum of leading industrialized nations for which it had been suspended way back in 2014 when it invaded Crimea. Trump’s rhetoric was also directed at the EU, which he referred to as “very nasty” to American businesses, pointing to numerous lawsuits against big U.S. companies such as Apple, Google, and Facebook.
The administration has stated that the tit-for-tat tariffs would be imposed under powers of Section 301 of the Trade Act and the International Emergency Economic Powers Act. The tariffs would target various sectors, such as automobiles, semiconductors, and drugs, as part of a continuation of Trump’s hardline trade policies.
As pundits forecast global economic repercussions of the imposition of such tariffs, Trump holds to his guns in trying to enter into agreements focusing on American gains in international trade talks.
