Trump To Impose Tariffs On Countries With Unfair Trade Policies To The US

President Donald Trump has already used tariffs as a weapon for many nations to accept the deported refugees after the recent mass deportations. Doubling down on it, Trump plans to impose tariffs throughout the world which includes both its allies and “enemies.” 

Trump signed a memo on Thursday instructing the staff to come up with custom tariffs for each nation based on existing rules.

Tariffs

Tariffs, to put it simply, are taxes put on imports that are collected by the government. The tax on these imports has to be paid by the company that has exported them. Tariffs are usually put in place to limit foreign competition and give more room for homegrown companies. 

The US, which has been at the center of “free trade,” is reconsidering its position. The Trump Administration has already increased tariffs on Steel And Aluminium imports to 25% and is planning on bringing other valuable goods under higher tariffs too. 

Reciprocal Tariffs

Trump has begun the process of reciprocal tariffs which have raised concerns throughout the globe. At the receiving end of the tariffs would be nations that treat US exports “unfairly” as deemed by Trump. Many economists and experts believe that this strategy might fuel the trade war and lead to increased inflation back home. As of now, the average U.S. tariff rates stand at 3.4% compared to Europe at 5%. 

The White House has also raised objections to other nations imposing higher tariffs on the same commodities. This includes a 10% tax put on US-made cars in Europe while European cars have only a 2.5% tariff in the US. The White House also brought attention to Brazil’s 18% tariffs on ethanol imports compared to the USA's 2.5%.

What to expect?

While many experts have raised concerns, Trump has ensured that no collateral damage is expected and the plans will boost manufacturing in the long run. Talking to reporters, he said “What's going to go up is jobs are going to go up. Prices could go up somewhat short term, but prices will also go down.” 

With the majority of people being unsure of the tariff plans, all facts indicate higher inflation in the coming time.

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