The president of the United States, Donald Trump, announced on Thursday the imposition of “reciprocal tariffs” to countries that tax US products, with the aim of matching the rates that these nations apply to exports of this country, and with the European Union (EU) among the main victims. “I have decided that, for reasons of justice, I will impose reciprocal tariff Oval office, where he advanced that he intends to sign a memorandum with that order in the next few minutes.
The EU is placed as one of the main victims of this policy, something that the American leader who complained that the European Union is “brutal” in its commercial relations with the US. Trump acknowledged that prices could rise as a result of these reciprocal tariffs that he imposes both allies and adversaries in the country, but the Republican hopes that they end up going down for a while. The US President has valued at a press conference at the White House that other countries now have in his hand the option to reduce or eliminate their own tariffs in response to these measures. “We want equal conditions,” he insisted by serving journalists. Then, the future secretary of Commerce, appointed by Trump, Howard Lutnick, has indicated that each country will be treated individually.
“The president is more than happy to reduce tariffs if countries want to do it. But we also recognize that tariffs, higher tariffs are not most of the problem in many cases, but in most,” Lutnik has pointed out. The objectives of these rates include China, Japan, South Korea and the European Union and would avoid a “unique size” approach for more personalized levies, although Trump has not ruled out that a standard standard is launched globally.
These will not be immediate, however, it is not yet known when they would go underway after the extensions agreed with other countries such as Mexico or Canada shortly after taking possession, which was the main unknown of this Thursday. This leads to think that Trump will use them as a negotiation tool to reduce the commercial deficit of their economy, since all countries could be potentially affected when applying taxes to their products. International media information suggests that on previous occasions the Deputy Chief of Trump Cabinet, Stephen Miller, had suggested that the VAT that is applied to the products imported from the US had to be taken into account when establishing this tariff reciprocity.
The order signed by Trump this afternoon launches the administrative process so that the Office of the High Commercial Representative (USTR), the Treasury and the Department of Commerce begin to evaluate and develop the new levies. The text of the order is not public, so no more details of a process are known that follows the open process on its first day in office when it launched an investigation into unfair commercial and monetary practices, as recalls’ the Country ‘that was focused on those nations with which it has a deficit in the trade balance, that is, of which matters more than it exports.
Wall Street is receiving the new Trump tariffs with enthusiasm. The bags have accelerated the increases, with the Dow Jones as the most benefited, after Trump signed today a memorandum so that the Trade Department studies the possibility of implementing “reciprocal” tariffs on countries that impose on some type of tax, such as VAT, to US imports, “starting with the countries with which we have a weaker commercial deficit.” However, the markets buy the idea that tariffs will have less bite than expected: there will be a country study by country, there will be a term before they enter into force and there will be a review every six months, to study its effect on Inflation. The dollar has weakened, the opposite of what would be expected with tariffs.
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