Washington (AP) – President Donald Trump takes additional measures to upset the global trade system, with plans to sign an order on Wednesday which would require that the American prices on imports correspond to the tax rates billed by other countries .
“It’s time to be reciprocal,” Trump told journalists earlier this week. “You will hear this word a lot. Reciprocal. If they charge us, we will charge them.
The president had suggested that the order would come on Tuesday or Wednesday. But when Tuesday passed without the prices being officially announced, Trump was invited to sign the order on Wednesday and Trump replied: “We will see what would happen.”
As Trump triggered a series of prices after being in power for less than a month, he has fully taken possession of the path of the American economy. It is a bet that his economic ideas can possibly provide significant results for voters, even if, according to Trump’s admission, import taxes could involve financial pain in the form of inflation and economic disturbances. For all Trump’s speeches, the impact will probably depend on the details of the prices and how other nations react.
A reciprocal tariff order could constitute a substantial increase in tax to be largely by consumers and American companies, as the census office indicated that the country had total imports of 4.1 billions of dollars last year . Prices could trigger reprisal measures by business partners who could grow worldwide and reset where the United States is with allies and rivals.
By signing the prescription, Trump would make his long -standing commitment to increase taxes on most imported goods, a clear interruption with his recent white house predecessors who considered prices as targeted tools to use strategically or obstacles that deserve to be lowered. Trump broke with this previous one saying he wanted to bring the United States back to the 1890s when import taxes were the dominant source of government income.
But if employment gains never materialize and if inflation remains high, it is an easy attack line for legislators and democratic candidates that Trump helped ultra-rare at the expense of the middle class.
“No matter how you cut it, costs will climb for consumers,” said Senate Democrat, Chuck Schumer in New York earlier this month. away.
Trump has put 10% tariffs on China for his contributions to the production of illegal drug fentanyl, and China has taken reprisal measures. He said he was ready if necessary on March 1 – after a 30 -day suspension – to put prices on Mexico and Canada for his conviction that they should do more to fight illegal immigration and smuggling drugs.
On Monday, he closed the exemptions at his 2018 prices on steel and aluminum, in addition to increasing the rates on aluminum. He also talked about additional taxes on imported cars, computer flea and pharmaceutical drugs.
Many dominant trade partners in America are preparing for an economic break in reaction to Trump’s possible actions.
In response to steel and aluminum prices, the head of the European Union Ursula von der Leyen said on Tuesday: “The unjustified prices on the EU will not remain unanswered – they will trigger firm and proportional countermeasures.” This means that motorcycles, jeans, bourbon and peanut butter from the United States could face new taxes abroad. Mexico and Canada – The two largest trade partners in America – have also prepared countermeasures.
Several Trump aid have declared in private that Trump’s long -standing objective with prices was a reciprocity. But Trump also described prices as a diplomatic tool to try to force Canada and Mexico to spend more resources to stop illegal immigration and drug trafficking in the United States. He has also repeatedly suggested that prices would be a source of income that could compensate for his expected income tax cuts.
But even before Trump officially signed the order, Goldman Sachs analysts concluded on Tuesday that he was unlikely to be the last word on the prices.
“Of course, even if President Trump considers reciprocal prices as an alternative to more radical measures for the moment, we only enter the fourth week of a four -year presidential mandate and it seems that there will probably be many Additional pricing announcements “, the investment bank analysts wrote.
Michael Zezas, Stanley’s strategist, wrote in a Sunday note that the “tariff trajectory” would shape what is happening with growth, inflation, interest rates and federal reserve policies this year.
“This is a major change compared to the era of globalization, when companies have reduced spending by continuing work and materials at a lower cost abroad,” said Zezas. “This transition should take many years, creating challenges for certain substantial opportunities for others.”
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