President Trump announced a plan to impose tariffs on imports, matching the tax rates of other countries. This move aims to eliminate trade imbalances and could potentially trigger a trade war with allies and rivals.
this morning rolled out his plan to increase US tariffs to match the tax rates that other countries charge on imports, possibly triggering a broader economic confrontation with allies and rivals alike as he hopes to eliminate any trade imbalances.
The US does have low average tariffs, but Trump's proclamation as written would seem designed to jack up taxes on imports, rather than pursue fairness as the US also has regulatory restrictions that limit foreign products, said Scott Lincicome, a trade expert at the Cato Institute, a libertarian think tank.
The possible tax increases on imports and exports could be large compared to the comparatively modest tariffs that Trump imposed during his first term. Trade in goods between Europe and the US nearly totalled US$1.3 trillion last year, with the US exporting US$267 billion less than it imports, according to the Census Bureau.
But by Trump's own admission his separate tariffs for national security and other reasons would be on top of the reciprocal tariffs, meaning that the playing field would not necessarily be level.
TRADE WAR TARIFFS ECONOMICS GLOBAL TRADE INFLATION
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