President Trump strongly believes that the US is being unfairly treated in global trade, asserting that many countries impose higher tariffs on US products compared to what the US imposes on theirs, resulting in a trade imbalance.
For instance, according to data from Global Trade Alert, a commerce policy assessment organization, India imposes tariffs that are typically 5 to 20% higher than those in the US on 87% of imported goods.
Trump aims to match the levies imposed on US imports with those applied to US products by other countries.
By implementing reciprocal tariffs, the president seeks to boost his “America First” economic policy, reduce the trade deficit, and enhance the competitiveness of US manufacturers, especially targeting major global powers like China and the European Union.
However, economists argue that the US benefits from its significant trade imbalances with the rest of the world. As the dollar serves as the global reserve currency, it is commonly used in international trade transactions, providing substantial advantages to the US economy.
Countries earn dollars from trade, which they then invest back into the US, often in government bonds, stocks, and real estate. This influx of investment helps keep US interest rates low, enabling US businesses and consumers to borrow and spend more.
Read DW’s in-depth explanation on reciprocal tariffs and Trump’s trade agenda.
