U.S. President Donald Trump speaks in the Oval Office of the White House in Washington, D.C., U.S., February 11, 2025. REUTERS/Kevin Lamarque
Trump Administration to Implement Reciprocal Tariffs on Trade Partners
Upcoming Tariff Announcement
The administration of U.S. President Donald Trump will announce reciprocal tariffs on all countries that impose duties on U.S. imports by Thursday, the White House confirmed. This decision is expected to escalate global trade tensions and contribute to inflationary pressures within the United States.
- White House Press Secretary Karoline Leavitt stated that the announcement will be made before Indian Prime Minister Narendra Modi’s visit on Thursday.
- Trump previously indicated on Monday that these tariffs would be introduced within two days and also mentioned the possibility of imposing separate duties on automobiles, semiconductors, and pharmaceuticals.
Potential Exemptions Under Consideration
House Speaker Mike Johnson acknowledged that the administration may exempt certain industries from the new tariff policy, including the automotive and pharmaceutical sectors.
- However, Johnson emphasized that final details remained uncertain, directing inquiries to the White House.
- The White House did not immediately confirm whether exemptions would be included.
Economic Impact and Inflation Concerns
Economists widely regard tariffs as inflationary, as they can increase production costs and lead to higher consumer prices.
- The Bureau of Labor Statistics reported on Wednesday that consumer prices rose in January at the fastest rate in nearly 18 months, raising concerns about inflation.
- The new tariff policy follows Trump’s Monday announcement imposing tariffs on all steel and aluminum imports, effective March 12.
- The decision has drawn criticism from major trade partners, including Mexico, Canada, and the European Union (EU), while Japan and Australia are reportedly seeking exemptions.
EU Response and Potential Retaliatory Measures
In response to Trump’s latest trade policy shift, EU trade ministers held a video conference on Wednesday to discuss their strategy.
- The EU’s initial approach will focus on negotiations to avoid a trade war, though countermeasures remain under consideration.
- An EU government official indicated that one possible response includes reinstating 2018 countermeasures—previously imposed on U.S. products such as bourbon and Harley-Davidson motorcycles in response to tariffs during Trump’s first term.
- These measures had been suspended under an agreement with the Biden administration but may now be reactivated.
A senior EU diplomat emphasized the importance of maintaining a measured approach, given that one month remains before the tariffs take effect.
Ongoing U.S.-China Trade Dispute
The U.S.-China trade conflict has also intensified in recent weeks:
- Last week, Trump imposed an additional 10% tariff on Chinese goods, which took effect on February 4.
- In response, China introduced retaliatory measures, adding further strain to bilateral economic relations.
The new tariff policies mark a significant shift in the administration’s trade strategy, prompting concerns about their economic impact and the potential for escalating retaliatory actions from key U.S. trading partners.
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