US President Donald Trump has unveiled his long-awaited “reciprocal” tariff plan, in a move that sent financial markets reeling amid growing fears of a global trade war.
On Wednesday, Trump announced a 10 percent “minimum baseline tariff” on nearly all imports into the United States. Higher duties on targeted countries will be phased in shortly afterwards.
He claimed the new import taxes were designed to reduce trade deficits and bring foreign manufacturing back to US shores. He also said they would pave the way for tax future cuts.
As Trump took aim at a global trading system he said “ripped off” the US, his tariffs prompted an immediate backlash, with some of America’s largest trading partners promising countermeasures.
Invoking the International Emergency Economic Powers Act of 1977, Trump announced a 10 percent tariff on all countries, scheduled to take effect on April 5.
Then, he revealed there would be “individualised” tariffs for countries that have large trade surpluses with the US or that impose higher duties on American imports. Those tariffs would come into effect four days later, on April 9.
Trump explained that his team calculated the “individualised” tariffs by taking half of what he claimed those countries charged the US for its exports.
As such, the European Union is headed for 20 percent tariffs, while the United Kingdom has been slapped with a 10 percent levy.
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