Trump moves to slap tariffs on nearly every nation, boosting trade war
“Whatever they charge us, we’re charging them,” Trump said Thursday.
WASHINGTON − President Donald Trump signed an memorandum on Thursday instructing his administration to pursue reciproca
tariffs against nations that put fees on U.S. exports, escalating a trade war that could lead to higher costs for Americans.
Trump did not immediately put tariffs in place. He directed trade officials to go country by country and put together a slate of tailored counter measures.
The tariffs are expected to be equivalent to the fees that individual countries put on products that are imported from the U.S., including tariffs and taxes, and take into account regulatory requirements and subsidies affecting U.S. businesses and consumers.
“Whatever they charge us, we’re charging them,” Trump said Thursday. “It’s a beautiful simple system.”
Trump had initially said he would put across-the-board tariffs on every nation to help fund his legislative agenda and protect American jobs before changing course last week. He said then that he was leaning toward a “reciprocal” tariff that would allow the U.S. to be more targeted in its approach.
The new approach reflects concern in the administration over fees that are typically passed on to consumers such as the value-added tax (VAT), which other nations use in place of a sales tax.
The process will be led by the secretary of Commerce and U.S. Trade Representative in consultation with the Treasury secretary, Homeland Security secretary and Trump’s economic team at the White House.
Countries with the highest trade deficits will be examined first, and those that the White House sees as having the most egregious issues, a senior official who briefed reporters ahead of the announcement said. Those countries could see new tariffs in weeks.
Blanket tariffs out, reciprocal ones in:Trump says he’ll pursue ‘reciprocal’ tariffs in latest bid to decrease US trade deficit
A White House official said the administration hopes the action kick-starts a conversation with U.S. partners about trade barriers. Trump is willing to lower tariffs if another nation lowers their fees, the official said of the potential for revisions.
Trump put steep 25% penalties on steel and aluminum imports, for which he provided no exemptions, at an Oval Office signing on Monday. He said he would be looking over the next four weeks at tariffs on automobiles, pharmaceuticals and computer chips.
The tariffs have hit competitors and allies, riling Democratic lawmakers, who say the measures are counterproductiv
to Trump’s goals of helping American workers, and U.S. partners, who are now threatening sharp increases of their own.
The White House said it was putting Office of Management and Budget Director Russell Vought in charge of writing and submitting a report within 180 days assessing the fiscal impacts. But the move was designed fulfill a requirement in the law, rather than to prompt a review and potential reversal in the administration’s actions.
That measure gives the president the authority to impose tariffs on imports for U.S. national security purposes after a review by the Commerce Department.
He is also using the International Emergency Economic Powers Act, which gives Trump the power to declare a national emergency in order to regulate imports. Trump invoked the act in January when he put tariffs on imports from Canada and Mexico.
Trump zeroes in Europe and its value-added tax
Trump has singled out the European Union, which had a trade deficit of $235.6 billion in 2024, according to the U.S. Census Bureau, and its value-added tax as a deterrent to the purchase of exports from the United States, specifically cars.
A value-added tax, or VAT, is a nationwide consumption tax that’s levied on every stage of production and distribution of goods and services but ultimately paid by consumers. VAT can also be levied on imports when they enter a country.
It’s usually a percentage slapped on the price of a good or service. For example, if a product costs $100 and there is a 15% VAT, the consumer pays $115 to the merchant. The merchant keeps $100 and $15, or the amount of the tax, goes to the government.
More than 170 countries around the world use a VAT to generate revenue, according to the Organization for Economic Cooperation and Development. The worldwide average VAT rate is around 15%, with regional averages ranging from 12% in Asia to 20% in Europe, the Tax Foundation said.
Trump said Monday he was pursuing additional tariffs because countries had “been taking advantage” of the United States through trade deficits.
“It’s time to be reciprocal. You’ll be hearing that word a lot: reciprocal,” he said then.
On Wednesday, Trump said tariffs on steel and aluminum would “go up at some point” without saying how much or when.
Since taking office Trump has hiked tariffs on China by 10%. He announced and then paused tariffs of 25% on Mexico and Canada, along with a 10% tariff on the northern nation’s energy sector, in exchange for concessions on immigration and fentanyl.
Contributing: Medora Lee, USA TODAY