A general view shows vehicles parked at the Nissan CIVAC plant, in Jiutepec, Morelos state, Mexico March 28, 2025. REUTERS/Margarita Perez Retana/File Photo
President Trump to Announce New Reciprocal Tariffs
U.S. President Donald Trump is set to introduce extensive new reciprocal tariffs on international trade partners, marking a significant departure from long-standing rules-based trade policies. The measures are anticipated to lead to increased costs and potential retaliatory actions from affected countries.
Details of the Tariff Plan
The specifics of President Trump’s “Liberation Day” tariff initiative remain under development and are being kept confidential ahead of an official announcement. The announcement is scheduled to take place at 4:00 p.m. Eastern Time (2000 GMT) in the White House Rose Garden. According to White House spokesperson Karoline Leavitt, the newly imposed duties will take effect immediately following the announcement. Additionally, a separate 25% global tariff on automobile imports is set to be enforced starting April 3.
Justification and Scope of the Tariffs
President Trump has stated that the new tariffs aim to balance U.S. tariff rates with those imposed by other nations while addressing non-tariff barriers that disadvantage American exports. However, the specific structure of these duties remains unclear, with reports indicating the possibility of a universal 20% tariff.
A former official from Trump’s first term suggested that instead of a blanket 20% tariff, the administration is more likely to implement country-specific tariffs at varied rates. The number of countries subject to these duties is expected to surpass the approximately 15 nations initially identified by Treasury Secretary Scott Bessent as having significant trade surpluses with the United States.
Implementation and Adjustments
Treasury Secretary Bessent indicated to Republican lawmakers that the reciprocal tariffs would function as a “cap” on the highest tariff level a country would face, with the possibility of reductions if they comply with U.S. demands. Ryan Majerus, a former official from the Department of Commerce and current partner at King & Spalding law firm, noted that while a universal tariff would be simpler to implement and generate more revenue, country-specific tariffs would better address unfair trade practices.
Additional Tariffs and Economic Impact
Since taking office, President Trump has already imposed a 20% tariff on all imports from China in response to concerns regarding fentanyl. Additionally, he has reinstated 25% duties on steel and aluminum, extending them to nearly $150 billion worth of downstream products. A temporary exemption for Canadian and Mexican goods from the fentanyl-related tariffs is set to expire on the same day as the new tariffs are announced.
All tariffs imposed by the administration, including existing ones, will be cumulative. For example, a Mexican-manufactured automobile previously subject to a 2.5% tariff will now face additional sectoral and fentanyl-related tariffs, leading to a cumulative rate of 52.5%.
Uncertainty regarding these tariffs is contributing to diminished investor, consumer, and business confidence. Economists from the Federal Reserve Bank of Atlanta have reported that corporate financial leaders anticipate higher prices, reduced hiring, and slower economic growth as a result of these measures. Investors have responded with caution, leading to a sharp decline in stock market values, erasing approximately $5 trillion since mid-February.
International Response and Retaliatory Measures
Several U.S. trading partners, including the European Union, Canada, and Mexico, have expressed their intention to impose retaliatory tariffs and other countermeasures. Meanwhile, some nations have sought negotiations with the U.S. administration.
Canadian Prime Minister Mark Carney and Mexican President Claudia Sheinbaum discussed strategies to oppose the proposed tariffs, emphasizing their commitment to North American economic competitiveness while respecting national sovereignty. In Canada, a “Buy Canadian” movement is reportedly making it more difficult for American products to gain market access.
Broader Economic Implications
President Trump has argued that longstanding free-trade agreements have negatively impacted American workers and manufacturers by increasing imports and widening the U.S. trade deficit. The U.S. currently has a goods trade deficit exceeding $1.2 trillion.
However, economists caution that imposing broad tariffs could result in higher consumer prices both domestically and globally, potentially disrupting economic growth. According to the Yale University Budget Lab, a 20% tariff, in addition to existing duties, would increase costs for the average U.S. household by at least $3,400 per year.
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