Trump unveils roadmap for reciprocal tariffs on US allies, competitors

Experts warn of challenges in structuring reciprocal tariffs

Washington: U.S. President Donald Trump unveiled a roadmap on Thursday for charging reciprocal tariffs on every country that puts duties on U.S. imports, his latest trade salvo directed at American friends and foes that the White House says will strengthen economic and national security.

“We want a level playing field,” Trump told reporters in the Oval Office, discussing the measures.

The tariffs were not going into effect on Thursday but could
begin to be imposed within weeks as Trump's trade and economic
team study bilateral tariff and trade relationships, a White
House official told reporters on a conference call.

Howard Lutnick, Trump's pick for Commerce secretary, said
the administration would address each affected country one by
one. He said the administration's studies on the issue would be
completed by April 1.

Trump, who campaigned on a pledge to bring down consumer
prices, said prices could go up in the short term as a result of
the moves. "Tariffs are great," he said.

The White House official, who spoke to reporters before
Trump's event in the Oval Office, said the administration would
examine what it called the most "egregious" issues first,
including countries with the biggest trade surpluses and highest
tariff rates.

Trump's reciprocal tariffs would match the higher duty
rates charged by other countries, he said. They also would aim
to counteract non-tariff trade barriers such as burdensome
regulations, value-added taxes, government subsidies and
exchange rate policies that can erect barriers to the flow of
U.S. products to foreign markets.

The effort also aims to launch negotiations with some
countries to reduce these barriers.

The announcement appeared designed at least in part to
trigger talks with other countries. The official said Trump
would gladly lower tariffs if other nations lowered theirs.

"So the president is more than happy to lower tariffs if
countries want to lower tariffs. But let's also recognize that
tariffs, higher tariffs, are not the biggest part of the problem
in many, if not most cases," the official said.

Targets include China, Japan, South Korea and the European
Union. The tariffs would avoid a "one size fits all" approach
for more customized levies, he said, though he did not rule out
a flat global tariff.

The official said a lack of U.S. reciprocal tariffs had
contributed to a large and persistent U.S. trade deficit.

Indian Prime Minister Narendra Modi, who was scheduled to
arrive at 4 p.m. (2100 GMT), oversees a government that imposes
the highest tariffs on U.S. exports of any major U.S. trading
partner. Trump acknowledged as much on Thursday.

The Republican president's latest round of market-rattling
tariffs has ratcheted up fears of a widening global trade war
and threatened to accelerate U.S. inflation.

Trump's trade advisers were finalizing plans on Wednesday
for the reciprocal tariffs the U.S. president has vowed to
impose on every country that charges duties on U.S. imports.

Trump, who took office on Jan. 20, has already announced
tariffs on all steel and aluminum imports beginning on March 12,
imposed 10% tariffs on goods from China, and imposed a 30-day
hold on tariffs on goods from neighboring Canada and Mexico.

Trump said on Monday he was also looking at separate tariffs
on cars, semiconductors and pharmaceuticals. On Thursday he said
car tariffs would be coming soon.

Trade experts say structuring the reciprocal tariffs that
Trump wants poses big challenges for his team, which may explain
why the latest duties were not announced earlier in the week.

Damon Pike, a trade specialist and principal with the U.S.
division of accounting firm BDO International, said the
reciprocal tariffs that Trump envisioned would result in a
monumental undertaking, given that each of the 186 members of
the World Customs Organization had different duty rates.

"At the international level, there’s something like 5,000
different descriptions at the 6-digit (product subheading)
level, so 5,000 times 186 nations. It’s almost an artificial
intelligence project," he said.

Experts say Trump could turn to several statutes, including
Section 122 of the Trade Act of 1974, which would only allow a
flat rate maximum of 15% for six months, or Section 338 of the
Tariff Act of 1930, which provides authority to act against
trade discrimination that disadvantages U.S. commerce, but has
never been used.

Trump also could use the same International Emergency
Economic Powers Act used to justify the tariffs imposed on China
and pending for Canada and Mexico.

The White House official said that measure and others could
be used.

"Absent IEEPA, there would need to be some kind of agency
action first before any trade remedy tariffs can be imposed …
but everything seems to be on the fast track," Pike said, adding
that normally tariffs would be done by Congress.