Donald Trump has threatened to impose a wave of tariffs on US imports, intensifying his commitment to review the world economic order.
On Thursday, the US president said he plans to introduce “reciprocal” tariffs, guaranteeing that the United States imposes on their imports from the rest of the world the same taxes faced by US products in other countries. “It’s just for everyone,” Trump said. “No other country may complain.”
The last announcement follows a series of others from the Trump administration, promising tariffs both close to the United States and their economic rivals. But most have not yet been applied.
This is what we know so far about Trump’s tariffs:
What are the tariffs announced Trump?
New tariffs were not announced on Thursday. Instead, the president ordered his officials to investigate what countries the US should go with import tariffs.
The White House had already said that it would impose a 25% tariff to the products from Canada and Mexico, would introduce a 10% tax on Canadian energy exports and modify tariffs on steel and aluminum around the world.
Until now, the only new tariff that has entered Trump in force is a new 10% tariff on goods from China.
What is a tariff and why do Trump want to use it against certain countries?
A tariff is a tax that taxes foreign goods imported to a country. The US is currently the world’s largest importer: in 2022, the value of imported goods in the US amounted to 3.2 billion dollars.
Before assuming the position, Trump threatened to impose tariffs on the three largest business partners in the United States: China, Mexico and Canada. Specifically, he said he wanted to impose a 25% tariff on Mexico and Canada and a 10% tariff on China, until countries took care of immigrants and illegal drugs that entered the United States.
For Trump, tariffs are a powerful asset to negotiate, but they have a high price.
Trump frames tariffs as a policy that can press American manufacturers and importers to produce goods in the country.
“All you have to do is build your plant in the United States and you won’t have tariffs,” Trump said. But the world economy has been intertwined. American farmers, for example, could not produce the amount of avocados produced by Mexico for many years.
What this means is that importers will probably have the cost of tariffs on consumers, causing an increase in prices.
What is a reciprocal tariff?
During the electoral campaign and in the White House, Trump has repeatedly raised the possibility of a wave of “reciprocal” tariffs: to tax imports from certain countries with the same type that these countries impose on products from the United States.
The president and his allies have presented this measure as a great rebalancing of the world economy, which, they claim, has leaned against the US for too long.
How will Tariffs affect US consumers?
Import tariffs usually raise prices.
Canada, for example, is a large crude oil exporter, while Mexico exports many fresh fruits and vegetables. Mexico is also the largest exporter of car parts to the United States. China is a large chips exporter used in electronic devices such as portable phones and computers.
It is not just imports that directly buy consumers. When tariffs upload the price of imports, that includes imported materials used to make other products in the United States. The increase in materials will end up impacting consumers.
Americans have been preparing for the impact that tariffs will have on prices. In a survey conducted in November by Harris/Guardian, almost two thirds of Americans said they expected prices to rise if Trump applied broad tariffs.
What federal laws give Trump the power to impose tariffs?
The US federal legislation grants the president broad powers to promulgate tariffs without the approval of Congress.
Trump has the power to declare a national economic emergency to promulgate his tariffs. This would invoke the Law of International Emergency Economic Powers (IEEPA), which gives the President the power to manage imports during a national emergency.
Trump can also apply tariffs under Section 232 of the Commercial Expansion Law, which gives the President the power to impose tariffs on certain industries. This is what Trump used in 2018, when he hit Canada, Mexico and the European Union with tariffs on aluminum and steel.
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