US escalating trade wars with sweeping reciprocal tariffs
WASHINGTON
U.S. President Donald Trump has inked plans for sweeping "reciprocal tariffs" that could hit both allies and competitors, in a dramatic escalation of an international trade war that economists warn could fuel inflation at home.
Since taking office, Trump has announced a broad range of tariffs targeting some of America's biggest trading partners, arguing that they would help tackle unfair practices and in some cases using the threats to influence policy.
Speaking in the Oval Office, Trump said on Feb. 13 he had decided to impose reciprocal duties, telling reporters that U.S. allies were often "worse than our enemies" on trade.
"Whatever countries charge the United States of America, we will charge them," Trump added.
In particular, he called the European Union "absolutely brutal" in trade ties with Washington.
The levies would be tailored to each U.S. trading partner and consider the tariffs they impose on American goods, alongside taxes seen as "discriminatory," such as value-added taxes (VATs), a White House official said on condition of anonymity.
With the memo Trump signed on Feb. 13, officials including the U.S. trade representative and commerce secretary will propose remedies on a country-by-country basis.
Trump's Commerce Secretary nominee Howard Lutnick said that studies should be completed by April 1, and the president could start tariffs as early as April 2.
Cost-of-living pressures were a key issue in the November election that saw Trump return to power, and the Republican has promised to swiftly reduce prices.
But economists caution that sweeping tariffs on U.S. imports would likely boost inflation, not reduce it, in the near term and could weigh on growth eventually.
Trump acknowledged that U.S. prices "could go up" due to tariffs, but he expressed confidence that they would ultimately ease.
The White House official said the United States has been "treated unfairly," saying a lack of reciprocity is a reason behind the country's "persistent annual trade deficit in goods" which topped $1 trillion last year.
One issue U.S. officials pointed out was the EU's 10 percent tariff on American autos, while the United States charges only 2.5 percent.
Countries like South Korea that have trade deals with Washington are less at risk, analysts believe.
Christine McDaniel, a senior research fellow at the Mercatus Center, told AFP that Trump does not appear constrained by World Trade Organization norms.
His memo forces countries to renegotiate tariff schedules with Washington, she said, adding that this could turn out well if others come to the table.
"But if countries refuse, and the U.S. raises its tariffs, then it is bad for the US" as American importers will face higher prices, said McDaniel, a former official in George W. Bush's administration.
