WASHINGTON – President Donald Trump on Thursday plans to increase US tariffs to match the rates that other countries charge on imports, perhaps with allies and rivals who want to eliminate trade imbalances. could cause wider economic conflicts.
“I decided for the purpose of fairness to claim mutual tariffs,” Trump said in the oval office of the declaration’s signature. “It’s fair to everyone. Other countries can’t complain.”
Trump’s Republican administration argued that its new tariffs level the playing field between US manufacturers and foreign competitors, but under current law, these new taxes are the same as American consumers and businesses. It is likely that you will pay directly or in the form of a higher price.
If his agenda boosts inflation and breaks growth, tariff politics could easily backfire Trump, which is a high harm for a president who tries to declare his authority over the US economy. I’ll bet on those involved.
The increase in tariffs will be customized for each country, partly targeting the launch of new trade negotiations. However, other countries may also feel the need to respond with increased customs duties on American goods. As a result, Trump may need to reassure consumers and businesses and find ways to counter the uncertainty caused by his tariffs.
The US has low average tariffs, but the written Trump declaration suggests that, rather than seeking fairness, it should jack up import taxes, as the US has regulatory restrictions on foreign products. It would appear to be designed for, Scott Lincicomb said. Kato Research Institute is a libertarian think tank.
“It inevitably means an increase in tariffs and therefore higher taxes for American consumers and manufacturers,” he said. Trump’s tariff plans “reflect fundamental misconceptions about how the global economy works.”
Trump’s declaration is similar to sales tax as a trade barrier included in mutual tariff calculations, identifying the value-added tax that is common in the European Union. Tariff rates in other countries, industry subsidies, regulations, and the likelihood of undervaluing currency are one of the factors the Trump administration uses to assess tariffs.
A senior White House official insisted on anonymity to preview details of the call with reporters, but said expected tariff revenues will help balance the expected $1.9 trillion budget deficit. Officials also said the required reviews for the tariffs could be completed within weeks or months.
The tax hikes that could potentially be imported and exported could be greater compared to the relatively modest tariffs Trump imposed during his first period. The trade in goods between Europe and the US totaled almost $1.3 trillion last year, $267 billion less than imports, according to the Census Bureau.
The president has been openly hostile to multiple US trading partners over the past few weeks, collecting tariff threats and tempting the economy to retaliate with their own import taxes that could sweep the trade war. .
Trump has placed an additional 10% tariff on Chinese imports due to the country’s role in the production of the opioid fentanyl. He also prepared tariffs in Mexico, two of its biggest trading partners, Canada and Mexico. In addition to that, on Monday he removed the exemption from the 2018 steel and aluminum tariffs. And he is meditating on new tariffs on computer chips and medicines.
But with Trump’s own approval, his separate tariffs on national security and other reasons would be on mutual tariffs. This means that the field is not necessarily on a level.
“That’s more,” Trump said if 25% steel and aluminum tariffs are being imposed by Trump. He said cars, computer chips and drugs will receive tariffs at a higher rate than what his mutual plans charge.
The EU, Canada and Mexico are ready to inflict economic pain on the US in response to Trump’s actions, but China already has US energy, farm machinery, large-engine cars, and antitrust laws It has taken retaliatory measures with its own tariffs. Google research.
The White House could improve trade fairness by charging the same import taxes as other countries, increasing revenue for the US government, while ultimately allowing negotiations that could improve trade. It’s claiming.
But Trump is also making a political bet that voters can tolerate higher levels of inflation. Price spikes in 2021 and 2022 have seriously undermined the popularity of then-President Joe Biden. Inflation has been rising since the November election, with the government reporting on Wednesday that the consumer price index is running at a 3% annual rate.
The Trump team has denounced criticism of tariffs despite acknowledging the possible financial pain. It also curtails regulations and enforces the possibility of Trump’s 2017 tax cuts through the freeze on spending and staff cuts on billionaire Musk advisor Elion Musk’s government efficiency initiative. It says tariffs need to be weighed against efforts to enforce savings.
However, the obstacle to this approach may be the possibility of a wide range of trade disputes that suppress and employ investment amid a greater inflationary pressure.
Analysts at Bankwells Fargo said in a report Thursday that tariffs are likely to undermine growth this year, as the extended tax cuts in 2026 help grow.
“Taxes will bring a modest stag impact on the economy,” the report said. The impact of tariffs will curb the growth of actual revenues, thus heavily on the growth of actual consumer spending. ”
Trump tried to minimize the chance that his policies could cause more than a short inflationary conflict. However, when asked if he would ask the agency to analyze the possible impact on prices, the president declined.
“There’s nothing to study,” Trump said. “It’s going to work.”
