WASHINGTON: Hours ahead of his meeting with PM Modi, US President Donald Trump inked plans Thursday for sweeping “reciprocal tariffs” hitting both allies and competitors, in a dramatic escalation of an international trade war that economists warn could fuel inflation at home.
The president 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, according to a senior White House official, leaving no clear date when they would take effect.
Trump named India in his announcement, saying the country had more tariffs than nearly any other nation.
Fresh import taxes would be customised 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 subsidies, regulations, value-added taxes and other factors that act to limit US trade, said the official prior to the announcement. Agencies
In almost all cases, countries charging us vastly more than we charge them: Trump
I’ve decided, for purposes of fairness, that I will charge a reciprocal tariff, meaning whatever countries charge the United States,” 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.”
Reciprocal tariffs would be the president’s latest step to rework American trade relationships. When it comes to high tariffs, India – like many other developing countries – is often cited as an offender. Trump has repeatedly criticised the high tariffs India charges on American goods, like Harley Davidson motorcycles.
Earlier this month, India tried to head off those criticisms by announcing it would voluntarily drop tariffs on certain US products, including motorcycles.
“Major exporting nations of the world attack our markets with punishing tariffs and even more punishing non-tariff barriers,” Trump trade adviser Peter Navarro told reporters, taking aim at EU in particular over VAT.
Washington will start by examining economies with which United States has its biggest deficits or “most egregious issues”, said a White House official. Trump acknowledged Thursday that US prices “could go up” due to tariffs, but he expressed confidence that they would ultimately ease.
Trump has announced a broad range of tariffs targeting some of the biggest American trading partners since taking office, arguing that they would help tackle unfair practices – and in some cases using the threats to influence policy. A White House official said US has been “treated unfairly,” saying a lack of reciprocity is a reason behind its “persistent annual trade deficit in goods”.
