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Trump says he will announce reciprocal tariffs on many countries next week
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Shipping containers are seen at the Terminal 1 container terminal at the Port of Los Angeles in Wilmington, California, US, on Oct. 17, 2024. (Reuters/Mike Blake)
P
resident Donald Trump said on Friday he plans to announce reciprocal tariffs on many countries by Monday or Tuesday of next week, a major escalation of his offensive to tear up and reshape global trade relationships in the US' favor.
Trump did not identify which countries would be hit but suggested it would be a broad effort that could also help solve US budget problems.
"I'll be announcing that, next week, reciprocal trade, so that we're treated evenly with other countries," Trump said. "We don't want any more, any less."
The move would fulfill Trump's campaign promise to impose tariffs on American imports equal to rates that trading partners impose on American exports.
Trump made the announcement during a meeting with visiting Japanese Prime Minister Shigeru Ishiba. He said auto tariffs remained on the table amid reports that the White House was weighing potential exemptions.
The new US president has long complained about the European Union's 10 percent tariffs on auto imports being much higher than the US car rate of 2.5 percent. He frequently states that Europe "won't take our cars" but ships millions west across the Atlantic every year.
The US, however, enjoys a 25 percent tariff on pickup trucks, a vital source of profits for Detroit automakers General Motors, Ford and Stellantis' US operations.
In recent confirmation hearings, Trump's Commerce secretary nominee Howard Lutnick voiced concerns about India's high tariff rates, while US Trade Representative nominee Jamieson Greer discussed US complaints about Vietnam's and Brazil's tariffs and trade barriers.
The US trade-weighted average tariff rate is about 2.2 percent, according to World Trade Organization data, compared to 12 percent for India, 6.7 percent for Brazil, 5.1 percent for Vietnam and 2.7 percent for European Union countries.
Trump told Republican lawmakers of his plans during budget discussions at the White House on Thursday, three sources familiar with the plan told Reuters. Trump and top aides have said they plan to use higher tariffs on imports to help pay for extending Trump's 2017 tax cuts, which independent budget analysts say could add trillions of dollars to the US debt.
Increased tariffs could offset some of that cost, though they have only accounted for about 2 percent of annual revenues in recent years.
Trump announced tariffs of 25 percent on Canada and Mexico on Saturday but delayed them after a negative reaction from investors. The two largest US trading partners agreed to increase enforcement efforts at the border, a top Trump priority.
Wall Street extended losses on Friday following the Reuters report of Trump's discussion with lawmakers.
US consumer sentiment dropped to a seven-month low in February, and attitudes soured among Republicans as households took stock of what they believe will be a surge in inflation from Trump's tariffs.
Trump and his Republicans aim to unveil their ambitious tax and spending package this weekend. It faces a perilous path through Congress, where Republicans hold narrow majorities in the House of Representatives and the Senate. Republicans are expected to rely on arcane budget rules to bypass Democratic opposition, which will require them to work in lockstep.
Trump is due to have dinner with Senate Republicans on Friday and attend the Super Bowl with House Speaker Mike Johnson on Sunday.
In his confirmation hearing on Thursday, Greer said other countries will need to reduce barriers to US exports if they want to maintain access to the US market, citing Vietnam in particular.
"I need, if I'm confirmed, to go to these countries and explain to them that if they want to enjoy continued market access to the United States, we need to have better reciprocity," Greer said.
