The potential of a global trade war with American allies and adversaries has increased since US President Donald Trump assigned his economics staff the duty of developing plans for reciprocal tariffs on any nation that imposes levies on US goods, reports RTE.
“On trade, I have decided for purposes of fairness, that I will charge a reciprocal tariff, meaning whatever countries charge the United States of America, we will charge them. No more, no less,” Mr Trump told reporters in the Oval Office, reports RTE.
In a document signed by Mr Trump, his staff was instructed to begin calculating levies to equal those charged by other nations and to combat non-tariff obstacles including value-added taxes that raise the cost of US cars and vehicle safety regulations that exclude them.
The edict issued yesterday did not apply new tariffs; rather, it began a process that may take weeks or months to investigate the duties that foreign trade partners have placed on US goods and then come up with a response, reports RTE.
In the meanwhile, the EU has said that Mr. Trump’s measures were “a step in the wrong direction” that increased economic uncertainty and promised to react “firmly and immediately” to trade obstacles.
Wall Street is concerned that more tariffs might stall economic development, prevent the Federal Reserve from lowering interest rates, and increase US inflation. Global markets rose as a result of the current lack of additional trade restrictions.
“While global financial markets may be inclined to take some relief from the delay in the immediate imposition of reciprocal tariffs, it is not clear to us whether the delay necessarily reflects a lower likelihood that they will eventually be imposed,” Barclays analysts said in a note, reports RTE.
The European Union, China, Japan, and South Korea are among Mr. Trump’s possible targets.
Mr. Trump’s choice for commerce secretary, Howard Lutnick, stated that the government will deal with each impacted nation individually and that research on the matter would be finished by April 1.
Prices may increase in the near future as a result of the actions, according to Mr. Trump, who ran on a platform of lowering consumer prices. Saying, “Tariffs are great,” reports RTE.
Speaking to reporters prior to Mr. Trump’s event in the Oval Office, a White House official stated that the government will start by researching nations with the largest trade surpluses and highest tariff rates.
According to him, Mr. Trump’s tariffs would be equal to the higher charges imposed by other nations and would be intended to offset onerous rules, value-added taxes, government subsidies, and exchange rate policies that can create obstacles to the export of American goods to overseas markets, reports RTE.
“They effectively don’t let us do business. So we’re going to put a number on that that is a fair number. We’re able to accurately determine the cost of these non-monetary trade barriers,” Mr Trump said, reports RTE.
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