President of the United States Donald Trump has ordered his administration to consider imposing reciprocal tariffs on Washington’s numerous trading partners.
Against the background of Mr. Trump’s mentioned decision, the likelihood of a broader campaign of the US against the global system is growing. Donald Trump claims that the specified system is titled against the United States.
The risk of a global trade war is also currently increasing. It is worth noting that other countries and regions are responding to the tightening of the tariff policy of the United States and are demonstrating their readiness for what can be called a two-way game. For example, China has already imposed retaliatory tariffs on the US. The European Union has declared its readiness for appropriate actions. It is worth noting that the global trade war is likely to exacerbate the recent consistent increase in geopolitical tensions. Tariff increases cannot, in principle, promote cooperation between world capitals. The escalation of the current situation may provoke the implementation of such a radically negative scenario as the fragmentation of the global economy according to the block principle. In this potential case, international cooperation, including in areas of trade and production, will face severe decline, which will have critical consequences that have, among other things, a political dimension. At the same time, so far such a scenario is a theoretical probability and not an inevitable prospect of the foreseeable future. It is also possible that at some point the world’s capitals will reach agreements on economic interaction at a higher level of cooperation.
On Thursday, February 13, Donald Trump signed a measure directing the US Trade Representative and Commerce secretary to propose new levies on a country-by-country basis in an effort to rebalance trade relations. This large-scale process may take weeks or months.
Howard Lutnick, Mr. Trump’s nominee to lead the Commerce Department, told reporters that all studies should be completed by April 1. It was also noted that Donald Trump may act immediately afterward.
New import taxes will be customized for each country to offset not just their own levies on US goods but also non-tariff barriers the nations impose in the form of unfair subsidies, regulations, value-added taxes, exchange rates, lax intellectual property protections, and other factors that act to limit United States trade. The corresponding statement is contained in a copy of the memo distributed by the White House.
In the Oval Office, Donald Trump said he would charge a reciprocal tariff, meaning whatever countries charge the United States. According to him, in almost all cases, other countries are charging the US vastly more than the United States charges them but those days are over.
Donald Trump also told reporters that he would later enact taxes on the import of cars, semiconductors, and pharmaceuticals over and above the reciprocal tariffs. He cited barriers in the European Union, including a VAT, as an example of what the US is looking to respond to.
Donald Trump also singled out Japan and South Korea as countries that, in his opinion, are taking advantage of the United States and for this reason could be targeted in his latest push. This was stated by a White House official who briefed reporters before the announcement.
Reciprocal tariffs are a measure within the framework of a large-scale set of actions by Mr. Trump aimed at addressing US trade deficits. He also intends to counteract what he says is unfair treatment of United States exports around the world.
Donald Trump has already imposed 10% tariffs on goods imported from China. Also next month, 25% duties on all US steel and aluminum imports will come into effect. The fact that these measures do not have an immediate effect indicates that Mr. Trump expects negotiations. He has already used similar tactics to extract concessions from Canada, Mexico, and Colombia.
Donald Trump’s trade adviser Peter Navarro said on Thursday during a conversation with media representatives that the goal is to have fair and reciprocal trade, and if the United States has that the country will have jobs, high wages, and high productivity. The official noted that Mr. Trump intends to discuss with other countries how the existing policies have created an imbalanced trading environment. It was also underlined that Donald Trump is ready to lower tariffs if other countries want to pare their levied or remove other trade barriers.
At the same time, Washington’s current brinkmanship has already generated a realistic threat to the world of a large-scale trade war, which is filling the global economy with uncertainty. Companies and consumers are waiting to see what decisions Donald Trump will make against the backdrop of retaliatory measures against Washington’s tightening tariff policy. In this case, a further escalation of the situation could unbalance global trade.
It is also worth noting separately that tariffs can have the opposite effect. This means that the tightening of the United States trade policy may have negative consequences for the country’s economy. It is worth mentioning that economists have repeatedly warned that the implementation of Donald Trump’s tariff threat is likely to provoke an acceleration of inflation in the United States.
Peter Navarro, while talking to media representatives, said that the revenue raised from tariffs would be a beautiful thing and argued that China-specific levies on certain key goods imposed during the first Mr. Trump administration had not significantly driven up prices.
Reciprocal tariffs are expected to be a very painful blow for less developed economies, where the average duties on US products are higher. It is worth noting that this approach differs from the universal levy on all imports proposed by Donald Trump during the 2024 presidential campaign.
A retrospective analysis shows that for a long time, the United States, being the largest economy in the world, dangled access to its market as an incentive and viewed openness as an economic advantage. Washington also advocated the so-called most favored nation approach to tariffs. This approach defined the rules of global trade since the 1940s. The relevant economic paradigm stipulated that all countries should treat trading partners equally and provide them with the same access as their most favored ones other than in cases where special free-trade agreements have been signed.
Donald Trump blames unfair trade practices, unsuccessful deals negotiated by his predecessors, or a combination of both for the United States’ bilateral trade deficit.
