Cnn
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President Donald Trump’s “Liberation Day” is there.
For months, Trump has kept companies and nations around the world largely in the darkness on his price plans that revolve around what he describes as “reciprocal rates”. But on April 2, he promised to answer at least some of their burning questions.
But Wednesday will probably not relieve companies that have wanted certainty since Trump’s victory in November. Rather, it will open a whole new box of worms, because the countries react to new prices with countermeasures on American goods, paving the way for a new phase of negotiations which could degenerate an already bitter trade war.
Although Trump told journalists on Monday evening that he had “installed” a pricing plan, the White House advisers still presented options on Tuesday, a few hours before his self-imposed deadline, CNN reported.
Among the plans taken into account were the personalization of tariff rates for each American trading partner, tariffs from certain countries but no others or the taxation of a flat rate of up to 20% on all imports. A White House official told CNN that they did not think that Trump would make a decision until the announcement ceremony on Wednesday at 4 p.m. from the Rose Garden.
What Trump finally decides to announce on the prices will be “immediately,” said the White House press secretary Karoline Leavitt on Tuesday. It is dubistically doubtful, but if that is the case, other nations would have little time to negotiate and could respond by immediately imposing countermeasures such as reprisals.
Trump considers prices as a means of achieving four main objectives: limiting the flow of fentanyl and illegal migration in the United States, levels the rules of the game with business partners, increasing government revenues and stimulating national manufacturing.
He linked fentanyl and border border problems at 20% prices which he has already levied on Chinese imports and 25% prices he threatened for Canada and Mexico.
In Trump’s opinion, the United States is “scammed” by countries with higher rate rates on products or countries manufactured in the United States with which the United States manages a trade deficit-that is, nations of which America imports it. He said that it is the reasoning to continue the reciprocal prices, which could also take into account what the Trump administration perceives as obstacles to non -tariff trade
These prices could strike particularly harsh development countries, in particular India, Brazil, Vietnam and other countries in Southeast and African. These nations have some of the largest differences in the rate of price billed on American products brought in its country compared to what the United States invoices them, according to a recent analysis by Morgan Stanley.
Economists of the investment bank note that Brazil, Indonesia, India, Thailand and Vietnam have the greatest proportion of products with a price differential greater than 5% compared to the rate at which the United States taxes the products of its nations.
But many countries of the European Union also have VAT and DST, making one of the largest business partners in America a probable target for higher prices.
The president of the European Commission, Ursula von der Leyen, sought to put Trump in opinion on Tuesday, saying that the EU had “a solid plan” to go back to the United States. Various other countries, including Canada, Mexico, China, Japan and South Korea, have also shaped reprisal plans.
Chinese Foreign Minister Wang Yi said in the comments published Tuesday by the CCTV state broadcaster that Beijing “counterattack” if the United States continues to engage in “blackmail”.
“” America first “should not be American intimidation, and it should not arouse its own interests on the basis of the prejudice of the legitimate rights and interests of other countries,” he was quoted as saying RT, a group of new Russians belonging to the State.
Israel adopted a different approach: she announced that she would cancel all her prices on American products on Tuesday, becoming the first country to do so since Trump’s re -election. This decision was probably intended to discourage the country of the president’s radar, although Israel had only a limited amount of prices on American exports.
However, countries following the traces of Israel may not be entirely protected from prices.
Trump has already imposed 25% prices on all imports of steel and aluminum and a 25% rate on foreign cars which should come into force on Thursday. A 25% rate on automotive parts abroad is expected to come into force in early May.
These prices will come in addition to all specific prices in the country – for example, a tariff of 10% on all imports from South Korea would mean that cars, aluminum and steel from there would be subject to total rate rates of 35%.
In addition to that, Trump could decide to contact even more prices on Wednesday on a sector scale.
The president presented these prices as a means of helping the United States government to rely less on income tax as a main form of income. He even went so far to say that pricing income could completely replace income taxes.
The prices in place and the uncertainty of those whom Trump has not yet announced have already led the US economy at a precarious time, when a growing share of consumers is struggling financially.
A pricing approach “Everything, everywhere, at the same time” could not only considerably increase consumers’ prices and cause the fall in financial markets, but also tip the American economy to a recession.
Economists have expressed concerns about the economic impacts of prices. Goldman Sachs analysts in a note last week said that the economic growth pulled by Trump’s budgetary policies would not be able to compensate for the damage caused by its massive price plan.
However, Trump and his advisers repeatedly rejected the idea that Trump’s plan could turn against him. Leavitt said Trump’s plans for tax reductions and deregulation will help reduce inflation, perhaps countering the tariffs on Tuesday.
“It will work,” said Leavitt.
