Key points
- We are going to make it [on] all countries: Trump
- These countries have a trade surplus with the US
- They make up almost 90pc of the $3.3tr in US merchandise imports
ISLAMABAD: President Donald Trump said he plans to impose reciprocal levies on every nation as part of his sweeping tariff push next week, but said the rates would be lower than expected.
“We’re going to make it all countries, and we’re going to make it very lenient,” Trump told reporters Wednesday in the Oval Office. “I think people are going to be very surprised. It’ll be, in many cases, less than the tariff that they’ve been charging us for decades”, according to Bloomberg.
The countries that President Donald Trump is likely to target with new tariffs next week have one thing in common: they all export more goods to the United States than they import from it. However, the similarities end there.
It’ll be, in many cases, less than the tariff that they’ve been charging us for decades.” – US President Donald Trump
The nations potentially facing new “reciprocal” tariffs on April 2 — which make up almost 90 per cent of the $3.3 trillion in merchandise imported by the United States last year — vary widely, from small Switzerland to China, the world’s second-largest economy, according to the Washington Post.
Reciprocal tariffs
US President Donald Trump recently instructed his officials to implement reciprocal tariffs on imports to the United States, sticking to his “eye for an eye” campaign promise on global trade matters.
“For the sake of fairness, I have decided to introduce a reciprocal tariff, meaning that whatever tariffs other countries impose on the United States, we will impose on them. No more, no less,” Trump told reporters in the Oval Office last month.
Trump’s return to the White House has been marked by a series of tariff announcements, including a 20 per cent levy on imports from China that came into effect on Tuesday, alongside 25 per cent tariffs on goods arriving from neighbouring Canada and Mexico. He has also revealed tariffs on steel and aluminium imports, which will take effect from 12th March.
Trump has long held the belief that the US is being treated unfairly in global trade. He argues that many countries impose higher tariffs on US goods than the US applies to theirs, creating an imbalance, according to DW News.
For instance, India imposes tariffs that are typically between 5 and 20 per cent higher than those of the US on 87 per cent of imported goods, according to data from Global Trade Alert, an organisation that assesses trade policies.
Matching the tariffs
Trump has stated that he aims to match the tariffs other countries apply to US products on imports to the US.
In addition to pressuring major powers like China and the European Union to reduce their duties, the president believes reciprocal tariffs will strengthen his “America First” economic policy by reducing the country’s trade deficit and enhancing the competitiveness of US manufacturers.
“This is for every country, and essentially, when they treat us fairly, we treat them fairly,” Trump told reporters on Thursday when signing proclamations to implement the reciprocal tariffs.
However, economists have pointed out that the US benefits from its large trade imbalances with the rest of the world, as the dollar — the global reserve currency — is used in most international trade, providing significant advantages to the US economy, according to DW News.
Countries use the dollars earned from trade to reinvest in the US, often through government bonds, stocks, and real estate. This helps keep US interest rates lower, allowing US businesses and consumers to borrow and spend more.
