U.S. President Donald Trump directed his officials to establish reciprocal tariffs on imports to the United States earlier this year. This move manifests his “eye for an eye” campaign promise on international trade issues.

Trump stated, “For purposes of fairness, I have decided that I will charge a reciprocal tariff, meaning whatever countries charge the United States of America, we will charge them. No more, no less.”

Since returning to the White House, Trump has made several tariff announcements and walked back on some, including a 20% levy on imports from China that went into effect in March. There are also currently 25% tariffs on goods from neighbors Canada and Mexico, but these are on hold for now.

The president also announced tariffs on steel and aluminum imports, effective from March 12.

The tariffs have sparked a surge in gold prices.

Trump believes that the U.S. is unfairly treated in international trade. He argues that many countries impose higher tariffs on U.S. goods than the U.S. does on theirs, creating an imbalance. He also sees reciprocal tariffs as a way to support his “America First” economic policy by reducing the country’s trade deficit and improving US manufacturers’ competitiveness.

How will Trump’s plan work? U.S. federal authorities have been given 180 days to identify countries which impose higher tariffs than the U.S. and then recommend tariffs on a country-specific basis.

The tariffs could take effect before that deadline. Instead of hitting the largest U.S. trading partners, Trump has stated that his reciprocal tariffs will hit “all countries” including close US allies. What will the impact of reciprocal tariffs be?

Economists have warned that the tariffs will increase consumer prices for imported goods to the U.S. and could spark a global trade war.

Source: https://www.dw.com/en/what-are-reciprocal-tariffs-trump-s-expanding-trade-agenda-explained/a-71596247?maca=en-rss-en-all-1573-rdf