Trump announces reciprocal tariffs: Ahead of his meeting with PM Modi, US President Donald Trump on Thursday announced that he has decided to move ahead with reciprocal tariffs. He said if countries charge the US with tax, they will be charged back. He added, "Reciprocal tariffs – meaning, whatever countries charge the United States of America, we will charge them – no more, no less. They charge us with tax and tariffs; it's very simple: we will charge them with exact tax and tariffs." In an explicit mention of India, Trump said, "India has more tariffs than nearly any other country."
Trump accused India of charging 'tremendous tariffs', as he claimed that Harley Davidson couldn't sell their motorbikes in India because, "the tax was so high, the tariff was so high, and Harley was forced to build" in India.
He added, "But I think they built a factory in India to avoid paying the tariffs. And that's what people can do with us. They can build a factory here, a plant or whatever it may be here and that includes the medical, that includes cars, that includes chips and semiconductors."
New tariffs would level the playing field: Trump administration
Trump's Republican administration has insisted that its new tariffs would level the playing field between US manufacturers and foreign competitors, though these new taxes would likely be paid by American consumers and businesses either directly or in the form of higher prices. The politics of tariffs could easily backfire on Trump if his agenda pushes up inflation and grinds down growth, making this a high-stakes wager for a president eager to declare his authority over the US economy.
Tariff increases to be customised for every country
The tariff increases would be customised for each country with the partial goal of starting trade new negotiations. But other nations might also feel the need to respond with their own tariff increases on American goods. As a result, Trump may need to find ways of assuring consumers and businesses that growth to counteract any uncertainty from the possible fallouts from his tariffs.
Trump's proclamation identifies value-added taxes — which are similar to sales taxes and common in the European Union — as a trade barrier to be included in any reciprocal tariff calculations, according to a senior White House official who insisted on anonymity to preview the details on a call with reporters.
Other nation's tariff rates, subsidies to industries, regulations and possible undervaluing of currencies would be among the factors the Trump administration would use to assess tariffs. The official said that the expected tariff revenues would help to balance the expected USD 1. 9 trillion budget deficit. The official also said the reviews needed for the tariffs could be completed within a matter of weeks or a few months.
(With inputs from AP)
