U.S. President Donald Trump has directed his economic team to devise a reciprocal tariff plan, imposing matching duties on countries that charge tariffs on U.S. imports. The move, announced as part of Trump's broader trade policy overhaul, could escalate tensions with major global economies.
Trump signed a memorandum instructing officials to calculate reciprocal tariffs to counter existing duties and non-tariff barriers imposed on U.S. goods. While the order stops short of an immediate tariff hike, it launches an investigation into foreign trade policies that could take weeks or months to complete.
The White House strategy will initially focus on countries with the largest trade surpluses and highest tariff rates, including China, Japan, South Korea, and the European Union. Trump has also criticized India, citing its high tariffs on U.S. exports.
Markets reacted cautiously to the announcement, with Wall Street seeing modest gains, relieved that immediate tariffs were not enacted. However, analysts warn that the plan could fuel inflation and disrupt global supply chains.
Commerce Secretary nominee Howard Lutnick said the administration aims to finalize studies by April 1, coinciding with a deadline set for reducing U.S. trade deficits.
Trade experts note that implementing customized reciprocal tariffs poses a complex legal and logistical challenge. The White House is exploring various trade statutes, including Section 122 of the Trade Act of 1974, which allows for a temporary 15% tariff.
Trump has already imposed 10% tariffs on Chinese goods, steel and aluminum duties, and has placed a 30-day hold on tariffs for Canada and Mexico. Additional levies on cars, semiconductors, and pharmaceuticals are under consideration.
While the White House maintains that the policy aims to encourage trade negotiations, experts warn it could lead to retaliatory measures from U.S. allies and rivals, intensifying trade disputes.
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