The Trump administration has announced plans to impose new tariffs on countries with unfair trade policies, aiming to bring investment back to the US and boost manufacturing.
The Trump administration has announced plans to impose new tariffs on countries that are deemed to have unfair trade policies. The move is aimed at bringing investment back to the ‘US’ and boosting manufacturing.
According to a memo signed by President Donald Trump, staff will develop custom tariffs for each country, taking into account factors such as existing tariffs, exchange rates, trade balances, and other rules. The plan is part of the administration’s effort to promote fair trade practices and protect American businesses and workers.
Which Countries Could Be Affected?
The memo instructs staff to report back with a plan for ‘reciprocal trade and tariffs’ within 180 days. This means that countries such as India, Vietnam, and Thailand, which have relatively higher tariffs and rely heavily on the ‘US’ market, may be affected by the new tariffs.
What Are Reciprocal Tariffs?
A tariff is a tax on imports collected by the government. In setting out its plans, the White House cited objections to tariffs such as the 10% tax that US-made cars face in ‘Europe’ compared with the 2.5% tariff the ‘US’ applies to cars brought into the ‘US’.
The administration has also expressed concerns about digital services taxes imposed by countries such as Canada and the UK on Big Tech firms, many of which are ‘US’-based. Additionally, the White House has criticized Europe’s Value Added Tax (VAT) rules, which it says put US exporters at a disadvantage.
Impact on the Economy
The announcement comes after a string of tariff-related moves from the new administration. Shares on Wall Street rose initially, but experts warn that tariffs can have significant costs and uncertainty for ‘US’ firms and risks of retaliation.
John Cassidy, chief executive of Red Cedar Investment Management, said Trump’s rapid-fire tariff announcements had unnerved Wall Street, which ‘does not like the unknown‘. However, he warned against over-reacting, noting that tariffs imposed during Trump’s first term had a relatively mild impact on the ‘US’ economy.
Donald Trump was born on June 14, 1946, in Queens, New York.
He graduated from the University of Pennsylvania and served as a real estate developer before entering politics.
Trump won the Republican presidential nomination in 2016 and defeated Democratic nominee Hillary Clinton in the general election.
He took office on January 20, 2017, and served one term until January 2021.
During his presidency, Trump implemented policies such as tax cuts and deregulation, but was also criticized for his handling of issues like immigration and healthcare.
Alex Durante, economist at the Tax Foundation, expressed concerns about the effectiveness of tariffs in dealing with trade complaints. He noted that Trump in his first term walked away from the Trans Pacific Partnership, a free trade agreement that aimed to address some of these same issues with countries in Asia.
What’s Next?
The administration has dismissed concerns about collateral economic damage, saying its plans will boost manufacturing in the ‘US’ over the long term. However, surveys indicate that the ‘US’ public remains concerned about the cost of living and is unconvinced about the benefits of tariffs, which economists have warned are likely to lead to higher prices for ‘US’ businesses and households.
Reporting contributed by Tom Espiner
