In a bold move aimed at leveling the global trade playing field, U.S. President Donald Trump on Thursday signed a memorandum initiating what he terms the \"Fair and Reciprocal Plan.\" This strategy mandates the administration to implement reciprocal tariffs on each foreign trading partner, ensuring that any tariff imposed on the United States is met with an equivalent charge in return.
\"I have decided for purposes of fairness, that I will charge a reciprocal tariff – meaning whatever countries charge the United States of America, we will charge them no more, no less. In other words, they charge us a tax or tariff and we charge them the exact same tax or tariff. Very simple,\" Trump declared during a press briefing at the White House.
The memorandum emphasizes the United States' intention to reduce its significant annual trade deficit in goods and address other perceived unfair trading practices. Under this plan, the administration will rigorously evaluate and counteract non-reciprocal trade arrangements with all U.S. trading partners, aiming for a comprehensive overhaul of existing trade relationships.
However, this approach marks a departure from traditional World Trade Organization (WTO) norms. According to Gary Clyde Hufbauer, a senior fellow at the Peterson Institute for International Economics, Trump redefines \"reciprocity\" from an overall balance of concessions to a line-by-line, country-by-country basis. \"With reciprocity, as defined by Trump, U.S. tariffs would probably on average 10 to 15 percentage points higher. In my opinion, tariffs actually hurt the U.S. economy, so while they would raise revenue … they would reduce GDP growth,\" Hufbauer commented.
Economists warn that this unilateral shift could strain international trade relations, potentially leading to retaliatory measures and increased trade frictions. The intricate balance of global trade may face new challenges as nations respond to the United States' aggressive tariff strategy.
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Trump signs plan to impose 'reciprocal' tariffs on trading partners
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