US President Donald Trump Unveils Reciprocal Tariffs
US President Donald Trump announced a plethora of new tariffs on its major trading partners on what he previously coined «Liberation Day».
Effective April 5, a baseline tariff rate of 10 percent will be imposed on imports coming into the US from all countries, according to a statement from the White House. In addition, about 60 economies will also face reciprocal tariffs that come into effect on April 9. In the case of China, for example, this would result in a total tariff of 54 percent, given the existing 20 percent rate previously imposed.
If any trading partner retaliates, US President Donald Trump vowed to respond by modifying tariffs to «increase or expand in scope the duties».
Three Incorrect Assumptions
According to Trump, the post-war international economic system has been based on three incorrect assumptions. First is that a US policy of free trade would lead others to follow. Second is that such liberalization would see more economic convergence and greater domestic consumption from US trading partners. Third is that the US would not accrue significant trade deficits.
«For decades starting in 1934, US trade policy has been organized around the principle of reciprocity,» Trump said. «However, despite a commitment to the principle of reciprocity, the trading relationship between the United States and its trading partners has become highly unbalanced, particularly in recent years.»
