In a long -awaited speech on Wednesday, President Donald Trump announced “Liberation Day” prices, imposing rights ranging from 10% to 49% on imports of 60 business partners, including India, China and the European Union.
The Trump administration maintains that these prices will thwart very unbalanced “trade deficits”, which, they said, weakened American manufacturing, supply chains and national security.
“They do it and we do them,” said Trump. “Very simple. I cannot become easier than that.”
A price is indeed a government tax specifically collected on foreign goods imported into a country.
They increase the cost of foreign products, making them less competitive than interior products.
Governments use prices to increase income and protect local foreign competition industries.
As part of Trump’s new price plan, China will face a price of 34%, the European Union of 20%, at Taiwan 32%and in India 26%.
Policy mainly targets the countries with which the United States has the highest trade deficits.
Importers are responsible for the payment of prices when goods enter the United States, but these costs are often reflected in consumers thanks to higher prices.
Although exporting countries do not directly pay prices, the increase in prices can make their goods less competitive.
Trump insisted that his trade policies would cause income and restore jobs, but he recognized In a social article of February truth that the Americans would feel “a certain pain” accordingly.
The 10% reference rate should come into force on April 5 at 12:01 p.m.
Higher rates for specific countries will come into force on April 9 at 12:01 a.m.
In his decree, Trump said that prices are necessary to correct commercial imbalances and protect national security.
He argued that major trade deficits have eroded the American manufacturing industry and left supply chains vulnerable to foreign influence, which he considers as harmful to the economic and strategic interests of the country.
“This situation is highlighted by disparate rate rates and non -pricing barriers that make American manufacturers more difficult to sell their products on foreign markets,” said Trump.
Trump said prices will eventually reduce the prices of Americans, but in the short term, their implementation should lead to higher prices for consumers.
In November, several companies told Business Insider that they would increase prices if the prices increased.
As importers often transmit additional costs to buyers, goods subject to prices will likely become more expensive, contributing to overall inflation.
The Federal Reserve Bank of Boston estimated that a price of 60% in China and 10% tariffs on the rest of the world would increase inflation between 1.4 and 2.2 percentage points.
The International Monetary Fund warned in October that if the United States, the euro area and China have imposed tariffs by 10%, American GDP could decrease by 1%.
The impact on employment remains uncertain.
Prices can create jobs in protected industries such as steel and manufacturing, but can also cause job losses in sectors that depend on imported materials or are faced with foreign reprisals.
According to a March survey of Duke University and the banks of the Federal Reserve of Richmond and Atlanta, one in four American companies thought that trade policy changes would have a negative impact on their job plans this year.
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