WASHINGTON — President Donald Trump in an all-caps post on Truth Social Thursday teased a new round of sweeping reciprocal tariffs, matching the higher rates other nations charge to import American goods.
“THREE GREAT WEEKS, PERHAPS THE BEST EVER, BUT TODAY IS THE BIG ONE: RECIPROCAL TARIFFS!!! MAKE AMERICA GREAT AGAIN!!!” Trump posted early Thursday.
Reciprocal tariffs were one of Trump’s core campaign pledges — his method for evening the score with foreign nations that place taxes on American goods and to solve what he has said are unfair trade practices.
“Very simply, it’s if they charge us, we charge them,” Trump said Sunday, explaining why he intends to enact reciprocal tariffs. He is set to share more details on the tariffs ahead of his visit with Indian Prime Minister Narendra Modi, White House press secretary Karoline Leavitt told reporters on Wednesday.
Leavitt echoed Trump’s message on Wednesday, saying, “This is something he believes strongly in, and it’s very simple logic as to why the president wants to impose reciprocal tariffs.” Other nations have been “ripping off” the US, she said, “and that’s why the president believes this will be a great policy that will benefit American workers and improve our national security.”
Still, it remains unclear exactly what Thursday’s announcement will look like. It has already been delayed — it was originally promised Tuesday or Wednesday. And Trump economic advisers Peter Navarro and Kevin Hassett both spoke to CNN this week, attempting to soften expectations about this week’s plans. Hassett said Wednesday negotiations were still ongoing, and Navarro said Tuesday that this week’s announcement could be to order an investigation into how to implement reciprocal tariffs rather than a directive to put them in place across the board.
Tariffs are a key part of Trump’s plan to raise revenue to pay for the extension of his 2017 tax cut on top of other promised tax cuts. But the burden of tariffs could ultimately fall on American consumers, economists say. Taxed importers pass the costs on to retailers, which then raise prices for consumers.
The tariffs are likely to hit developing countries hardest, especially India, Brazil, Vietnam and other Southeast Asian and African countries, given that they have some of the widest differences in tariff rates charged on US goods brought into their countries compared to what the US charges them.
For instance, in 2022, the US average tariff rate on imports from India was 3%, whereas India’s average tariff rate on imports from the US was 9.5%, according to World Bank data.
However, given Trump is meeting with Modi on Thursday, the two leaders could reach an agreement that avoids or delays new tariffs on Indian exports to the US. Last year, India exported $87 billion worth of goods to the US, while the US exported $42 billion worth of goods, according to Commerce Department data.
The reciprocal tariffs join the 10% across-the-board tariff that went into effect last week on top of other tariffs on Chinese goods and stricter 25% tariffs on steel and aluminum that Trump announced on Monday.
If Trump goes forward with the 25% tariffs on Mexico and Canada that were pushed back until March 1, the total direct cost of the import taxes on Chinese, Mexican and Canadian goods would amount to a tax hike of more than $1,200 per year for the typical American household, Peterson Institute researchers have found. Reciprocal tariffs would likely add to that number.
What could get more expensive?
The United States imports goods that are cheaper to make abroad or that may even be impossible to produce on US soil.
Medical-grade gloves as well as resistors and capacitors – tiny components found in microwaves and washing machines – are among the products that could face a price hike, according to Greg Husisian, a partner at law firm Foley & Lardner who specializes in international trade issues.
Dollar-for-dollar tariffs will also make European cars much more expensive. Currently, the US imposes a 2.5% tariff on European cars. In contrast, American cars exported to European Union countries face a 10% tariff.
Justin Weidner, an economist at Deutsche Bank, said that if Americans can’t switch to cheaper alternatives, they’ll probably end up paying the cost of the tariffs.
However, it also depends on whether manufacturers, retailers, or other companies in the supply chain can absorb any of those costs themselves.
For Black History Month, ABC Action News reporter Michael Paluska sat down with two Black photographers. Both use their images to inspire and educate.
