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Trump Declares Reciprocal Tariffs as Trade Conflict Intensifies
The new tariffs imposed by the U.S. President are aimed at both allies and rivals, sparking worries over inflation and the state of global trade relations.
In a notable change to U.S. trade policy, President Donald Trump has declared the introduction of 'reciprocal tariffs' aimed at both allies and adversaries.
This announcement, delivered during a press briefing in the Oval Office, is seen as an intensification of the ongoing international trade dispute.
Trump described U.S. allies as frequently being 'worse than our enemies' in terms of trade practices.
The new tariffs will be specifically calibrated for each trading partner, considering elements such as value added tax (VAT).
Since assuming office, Trump has consistently championed tariffs as a strategy to combat what he views as unjust trade practices, claiming these actions could enhance government revenue and rectify trade imbalances.
This latest announcement comes just hours prior to Trump’s meeting with Indian Prime Minister Narendra Modi in Washington, D.C., with a timeline for implementing these tariffs yet to be revealed.
Analysts have pointed out that the reciprocal nature of the tariffs could have broader ramifications for emerging market economies, including India and Thailand, which already have higher effective tariff rates on U.S. imports.
Countries like South Korea, which have trade agreements in place with the United States, may experience less impact from this tariff approach.
There are concerns about the potential effects of expanded tariffs on inflation within the U.S. economy.
Economists caution that broad tariffs on imports could result in rising prices for consumers, conflicting with Trump’s aims to alleviate cost-of-living pressures that were pivotal to his campaign message in the November elections.
Although Trump’s nominee for commerce secretary, Howard Lutnick, has suggested that raising duties may not necessarily lead to extensive inflation, some economists remain cautious overall.
Trump has previously expressed his intention to impose tariffs equivalent to those enforced by other countries.
For example, if India were to levy a 25% tariff on U.S. automobiles, the U.S. would respond with a matching 25% tariff on Indian auto imports.
In the lead-up to the Modi meeting, India has reportedly proposed certain tariff concessions on specific products, such as high-end motorcycles.
Analysts at Nomura have proposed that Trump’s aim in enforcing reciprocal tariffs is to ensure fair treatment for U.S. exports and may indirectly tackle existing trade imbalances with other nations.
According to Nomura, India has an average effective tariff of around 9.5% on U.S. exports, while U.S. tariffs on Indian exports are approximately 3%.
Other Asian countries, including Thailand and China, have tariffs on U.S. goods of 6.2% and 7.1%, respectively.
Economic experts observe that higher tariffs are often employed by less wealthy nations as a method of generating revenue and protecting domestic industries where non-tariff barriers are less practical.
This announcement, delivered during a press briefing in the Oval Office, is seen as an intensification of the ongoing international trade dispute.
Trump described U.S. allies as frequently being 'worse than our enemies' in terms of trade practices.
The new tariffs will be specifically calibrated for each trading partner, considering elements such as value added tax (VAT).
Since assuming office, Trump has consistently championed tariffs as a strategy to combat what he views as unjust trade practices, claiming these actions could enhance government revenue and rectify trade imbalances.
This latest announcement comes just hours prior to Trump’s meeting with Indian Prime Minister Narendra Modi in Washington, D.C., with a timeline for implementing these tariffs yet to be revealed.
Analysts have pointed out that the reciprocal nature of the tariffs could have broader ramifications for emerging market economies, including India and Thailand, which already have higher effective tariff rates on U.S. imports.
Countries like South Korea, which have trade agreements in place with the United States, may experience less impact from this tariff approach.
There are concerns about the potential effects of expanded tariffs on inflation within the U.S. economy.
Economists caution that broad tariffs on imports could result in rising prices for consumers, conflicting with Trump’s aims to alleviate cost-of-living pressures that were pivotal to his campaign message in the November elections.
Although Trump’s nominee for commerce secretary, Howard Lutnick, has suggested that raising duties may not necessarily lead to extensive inflation, some economists remain cautious overall.
Trump has previously expressed his intention to impose tariffs equivalent to those enforced by other countries.
For example, if India were to levy a 25% tariff on U.S. automobiles, the U.S. would respond with a matching 25% tariff on Indian auto imports.
In the lead-up to the Modi meeting, India has reportedly proposed certain tariff concessions on specific products, such as high-end motorcycles.
Analysts at Nomura have proposed that Trump’s aim in enforcing reciprocal tariffs is to ensure fair treatment for U.S. exports and may indirectly tackle existing trade imbalances with other nations.
According to Nomura, India has an average effective tariff of around 9.5% on U.S. exports, while U.S. tariffs on Indian exports are approximately 3%.
Other Asian countries, including Thailand and China, have tariffs on U.S. goods of 6.2% and 7.1%, respectively.
Economic experts observe that higher tariffs are often employed by less wealthy nations as a method of generating revenue and protecting domestic industries where non-tariff barriers are less practical.
