President Donald Trump has announced mutual tariffs that will sweep “for fairness purposes” to all US trading partners.
Speaking from the oval office on February 13, the president confirmed that tariffs would be implemented consistently to the amounts he would charge the US.
“It works really well,” Trump told reporters. “It’s a beautiful, simple system and you don’t have to worry about too much or too little charging.”
The tariffs could come into effect on April 2 after the investigation is completed, Howard Lutnick, a candidate for Trump’s Commerce Secretary, said he was in discussion with the president of the oval office. .
Below are five key points from Trump’s latest tariff plans.
The country has had the most impact
As many of these countries maintain a wider tariff gap today, mutual tariffs are likely to affect emerging market economies in Brazil, India, Vietnam, and several Southeast Asian and African countries It will become.
“Traditionally, India is on the top of the pack,” Trump told reporters, saying that the US cannot sell Harley-Davidson products in India due to high tariffs.
He made comments before meeting with Indian Prime Minister Narendra Modi in his oval office on February 13th.
“They charge more tariffs than any other country,” Trump said. “We’ll talk about it.”
The president also said he wanted to pick up Taiwan and move all chip production from the US to Taiwan and bring manufacturing back to the country.
In 2023, the average nominal tariff rate for imported goods in Taiwan was 6.34%, with industrial goods at 4.13% and agricultural goods at 15.06%.
The workers are standing next to a pile of wheat loaded onto a ship at the port of the Diendaryal Port Authority in Kandra, India on May 18, 2022. Sam Panthaky/AFP via Getty Images
“Brick is dead.”
Trump warned that BRICS countries could face 100% tariffs.
Over the past few years, BRICS, an emerging market group led by Brazil, Russia, India, China and South Africa, has defended anti-A-US dollar initiatives, including the resolution of bilateral trade in local currencies.
On February 13th, Trump declared that “BRICS is dead.”
The President repeatedly vowed to the customs state when he was engaged in a joint effort. And soon after the November 2024 election, he threatened to impose tariffs on BRICS countries that had tried to replace the US dollar as a reserve currency.
He told reporters that BRICS was founded “for a bad purpose,” but now its members refrain from discussing the anti-dollar bloc.
“They’re afraid to talk about it because they said if they want to play a game with dollars they’ll be hit with 100% tariffs,” Trump said.
“We have them on the barrel.”
However, some observers said they believe Trump’s tariff strategy could encourage other countries to diversify from the dollar.
“I think countries subject to tariffs and potential punitive tariffs will try to diversify from dollars to other assets in terms of reserve currency,” wrote Chris Mancini, portfolio manager for Gabelli Gold Fund. It’s there. Recent notes.
United Arab Emirates President Sheikh Mohamed bin Zayed Al Nahyan, South African President Cyril Ramaphosa and Chinese leader Xi Jinping Mauro Vieira at the BRICS Summit held in Kazan, Russia on October 23, 2024. I will be attending the meeting. Alexander Nemenov/Pool/AFP via Getty Images
Trump singles EU VAT
Regime’s mutual tariffs cover the European Union’s value-added tax (VAT). This is a sales tax that applies to each stage of the production and distribution process for all domestic and imported goods and services purchased and sold in the trade bloc.
VAT is different from sales tax, with the latter being charged at the time of sale.
The EU’s average standard VAT rate is 21.8%, so the White House said the tariff rate for US exports entering the region is almost tripled.
Lutnick called it “export subsidies” because it drops VAT when the EU sells to the US.
“So we’re going to deal with each country one by one, but here’s the key. They’ll get an invitation to trade with the world’s greatest consumer economy,” Lutnick told reporters. Ta.
“In exchange for dealing with the world’s largest consumer economy, you have to treat us the way we treat you.”
US cars shipped to the EU are subject to 10% customs duties. In contrast, European cars entering the US face a 2.5% levy.
According to Deutsche Bank analysis, when VAT is considered, countries jumping on US tariffs will be India, Argentina, South Africa and European countries.
Shoppers will pass on signs to promote the rate of value-added tax (VAT) decline at their store in Bristol, UK on December 1, 2008. Matt Cardi/Getty Images
Products were most affected
A wide range of products could be influenced by the administration’s “fair and mutual plans.”
The White House provided examples of where the US could impose mutual tariffs.
Brazil’s ethanol exports are 2.5% and tariffs are present, while in South American countries, US ethanol exports are 18%. Last year, the US imported more than $200 million in ethanol from Brazil, and the world’s largest economy exported to Brazil with $52 million in ethanol.
Drugs and semiconductors could be affected by the latest initiatives, Trump said.
According to Trump, Taiwan has adopted the US chip business, while China has adopted the US drug manufacturing.
“We want to bring it back to the US,” he told reporters. “If they don’t get it back, we won’t be very happy.”
Images of the electronic wafers are on display at the Museum of Innovation (TSMC) in Hsinchu, Taiwan on November 21, 2024. I-HWA Cheng/AFP via Getty Images
“Prices will remain the same or fall.”
The economist chorus says the president’s tariff plans could rekindle price pressure. Trump told reporters that his taxation would have little impact on inflation, and said he disagreed.
“Prices could go up a little short term, but prices would also go down,” he said. “So Americans should be prepared for short-term pain.
“In the end, prices will either remain the same or go down.”
He said he believes there could be a “short-term disability,” but the president said the US would benefit in the long term.
Trump said he believes these tariff policies will create more jobs in the United States.
“We know that work is produced at a level we’ve never seen before,” Trump said.
The president also predicted that his economic agenda would help lower interest rates.
Last month, the Federal Reserve maintained interest rates without changing, and the latest inflation report has prompted investors to rethink their financial policy expectations. The futures market is penciling interest rates for the next quarter of September.
Federal Reserve Chairman Jerome Powell, who testified before Congress this week, indicated that the agency is not in a hurry to lower interest rates until inflation progresses.
The president sought a lower fee on the Truth Social Post on February 12th.
When asked about the revenue generated by the administration’s tariffs, Trump said it would be “a staggering amount.”
Federal Reserve Chairman Jerome Powell testifies before a House Committee on Washington’s Monetary Policy on February 12, 2025. Madalina Vasiliu/The Epoch Times
