What will Trump’s mutual tariffs look like?
John Lonesky Group’s president, while appearing in “Varney & Co.”, breaks down President Donald Trump’s economic agenda.
president Donald Trump On Thursday, he signed an executive order imposing mutual tariffs on US trading partners, effectively increasing import obligations to suit those imposed on American exports.
“Today is a big thing: mutual tariffs,” Trump wrote on his social media platform Truth Social ahead of the announcement. His executive order begins a process in which tariffs on each other could be imposed within weeks of the White House trade and economic team studying American trading relationships, officials in a reporter on a conference call He told the group.
The Trump administration aims to complete the trade review by April 1, and is the first and most “worst” one, including countries with a massive trade surplus with the US and the highest tariff rate on American goods. I plan to target what is called a problem. The president’s tariffs are consistent with higher tariff rates in other countries, and to counter and reduce other trade barriers, such as burdensome regulations, value-added taxes, government subsidies, and exchange rate policies. We aim to negotiate with some countries.
A new analysis by Goldman Sachs Economists, led by Jan Hatzius, is Mutual Tariffs We found that we could work and likely increased the average tariffs imposed on imports into the US, but it also helps reduce trade uncertainty.
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President Donald Trump plans to deploy mutual tariff plans on US trading partners. (Jim Watson/AFP via Getty Images/Getty Images)
“If applied at a product-specific level (for example, US tariffs on cars from the EU equal the same rate that the EU applies to cars from the US), the US weighted average tariff rate is about It could increase by 2 (percentage points). If applied at the national level, its effect could be reduced,” Goldman Economist wrote.
“Although mutual customs policies pose risks, it could also help to gradually reduce uncertainty in trade policy after it is announced.
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“President Trump’s comments suggest that he sees him as an alternative to the 10-20% universal tariffs he has discussed in the past,” the economist wrote. “If US tariffs are set to match Foreign tariff ratesin theory, it is unlikely that US tariffs will rise significantly further. It may also ultimately lead some trading partners to reduce tariffs (and theoretically reduce US tariffs). ”
They also said there are risks associated with mutual tariffs if the Trump administration attempts to equalize non-tariff barriers (NTBs) to transactions, but that said, “it’s hard to quantify, but more.” It could lead to a huge increase.”
“The main risk is that the Trump administration can consider value-added tax (VAT) in its calculations. “However, during that time, President Trump Although some countries have criticised VAT, there is no indication at this point that the mutual tariff policies he plans to announce will include VAT in the calculations. ”
Mutual tariffs equalize US tariffs on imports with what American exporters face overseas. (Reuters/Carlos Barrier/Reuters Photos)
Mutual tariffs could be the latest step in Trump’s efforts to restructure US trade policies, but the report notes that there is likely to be further development as the president’s term progresses. I did.
“Of course, even if President Trump sees it as an alternative to more drastic measures at this time, he is only taking part in the fourth week of his four-year presidency. He announced mutual tariffs this week. “The Goldman Economist said.
A quick warning from Trump’s tariff trade group
Duties are taxes on imported goods or services. (Photo by Reuters/Mike Blake/Reuters)
Kevin Hassett, Director National Economic Council“Mutual tariffs have been an absolute priority for the president and have been forever,” he told reporters on Wednesday, indicating that discussions about them began with foreign trading partners.
“Our trading partners charge us more tariffs with tariffs than we charge. And that’s what he talked about before and there’s more action happening about it today. “It’s probably. We’ve started negotiating with other countries,” he said.
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Hassett replied, “We laid the foundation for discussions over mutual trade,” with what negotiating with other countries involved.
He added that Trump’s candidate, Commerce Secretary, Howard Lutnick, is leading those meetings.
Kristen Altus and Reuters from Fox Business contributed to this report