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President Donald Trump announced on Thursday that the U.S. will levy significant import taxes on any country that imposes its own taxes on American goods, starting a process that experts say could lead to a global trade war.
Speaking in the Oval Office, Trump said the plan would treat all countries the same based on their own individual trade laws.
“I’ve decided for purposes of fairness that I will charge a reciprocal tariff ... it’s fair to all. No other country can complain,” he said. “If you build your product in the United States, there are no tariffs ... this should have been done years ago.”
He added: “We’re going to make America rich again.”
The president has frequently groused about trade deficits that America has with other countries — even close allies such as Canada and Mexico — and he often claims that trade deficits are evidence that the U.S. is being taken advantage of or “ripped off.”
He and his allies have suggested that higher tariffs in foreign imports would create a level playing field between the U.S. manufacturing and foreign competition, but in reality the tariffs would be a tax increase on Americans paid in the form of higher prices.
He told reporters the tariffs would not be implemented immediately and said the memorandum he signed has tasked his administration with studying trade imbalances and reporting on which countries’ imports should be subject to which tax rates. Because tariffs are taxes added to prices paid by consumers, they could potentially supercharge rates of inflation that he has promised to bring down.
Asked whether the tariffs would lead to more inflation, he denied they would have that effect and told reporters: “Prices could go up short term, but prices will also go down.”
“Long-term it’s going to make our country a fortune,” he said. “I'll tell you, what will go up is jobs. The jobs will go up tremendously. We're going to have great jobs, jobs for everybody. This is something that should have been done many years ago.”
Trump also claimed that the imposition of tariffs would help the U.S. pay off its $36 trillion national debt. Commerce Secretary Howard Lutnick, who was in the Oval Office to witness Trump sign the memorandum, told reporters that the tariffs could go into effect as early as April 2.
In a separate statement posted to his Truth Social platform, Trump said the United States would be considering value-added tax systems to be the same as tariffs for the purpose of his reciprocal tariff policy.
“Sending merchandise, product, or anything by any other name through another Country, for purposes of unfairly harming America, will not be accepted. In addition, we will make provision for subsidies provided by Countries in order to take Economic advantage of the United States,” he wrote.
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