Trump should announce “reciprocal” prices in a risky decision that could reshape the economy

Washington (AP) – After weeks of media shining from the White House and Public Anxiety, President Donald Trump takes place on Wednesday to announce a self -written dam “Reciprocal” prices On the friend and the enemy.

New prices – coming on what Trump called “Liberation day” – is an offer to stimulate American manufacturing and punish other countries for what he said is years of unfair commercial practices. But by most of economists’ assessments, risky move threatens to plunge the economy into a slowdown and old decades alliances.

The White House gives off confidence despite the fact of the political and financial bet.

“On April 2, 2025, will be one of the most important days in modern American history,” said the White House press secretary Karoline Leavitt during the Tuesday briefing while adding that the new prices will take effect immediately.

The reciprocal prices that Trump plans to announce according to recent announcements similar of 25% of taxes on Automobile imports; levy China, Canada and Mexico; and extended prices on Steel and aluminum. Trump also put prices against countries that matter to Venezuela oil And the plans separate import taxes on pharmaceutical drugs, wood, copper and computer chips.

None of the warning signs on a fall in the stock market or a feeling of transformation consumption only has the administration has publicly experienced the strategy.

The Commercial Advisor of the White House, Peter Navarro, suggested that the new prices would increase $ 600 billion per yearThis would be the highest increase in tax since the Second World War. The Treasury Secretary, Scott Bessent, told legislators that the prices would be capped and could be negotiated down by other countries, according to the office of representative Kevin Hern, R-Okla. But the White House has not yet confirmed the details of the policy, despite Trump said on Monday that it had made its decision.

Importers would likely transmit part of the cost of consumers. The LAB budget of the University of Yale estimates that a universal rate of 20% would cost the average household of $ 3,400 to $ 4,200.

The premise of the administration is that manufacturers will quickly increase interior production and create new factory jobs – and the White House expresses the confidence that Trump’s approach is absolutely correct.

“They won’t be mistaken,” said Leavitt. “It will work. And the president has a brilliant team of advisers who have been studying these problems for decades. And we focus on restoring America’s golden age and making America a manufacturing superpower. ”

Bold optimism did not do much to reassure the public or the allies who consider import taxes as a threat.

Based on the possibility of large 20% tariffs that have been floated by certain white house aid, most of the analyzes see a tarnished economy by higher prices and stagnation. The economic growth of the United States – measured by the gross domestic product – would be roughly a lower percentage point, and clothing, oil, cars, housing, grocery and even insurance would cost more, according to the analysis of the budgetary laboratory.

Trump would apply these prices alone, because he has ways to do so legally without the approval of the congress. This allows legislators and democratic decision -makers to criticize the republican administration, if the uncertainty expressed by companies and the decline in consumer feeling are in fact signs of future problems.

Heather Boushey, who was a member of the Biden House White House Council, noted that the least aggressive prices that Trump imposed during his first mandate had not aroused the rebirth of the manufacturing he had promised to voters.

“We do not see any indications of the boom that the president has promised,” said Boushey. “It’s a failed strategy.”

The Democratic leader of the Senate, Chuck Schumer of New York, said that prices were fundamentally a means for Trump to increase income in order to pay for its expected extensions of income tax reductions which disproportionately promote millionaires and billionaires.

“Almost everything they do, including prices, it seems to me, aims to obtain these tax reductions for the rich,” said Schumer on Tuesday on the Senate soil.

Even the Republicans who trust Trump’s instincts have recognized that prices could disrupt an economy with an unemployment rate that is in good health of 4.1%.

“We will see how it all develops,” said Chamber Mike Johnson, R-La. “It can be difficult at first. But I think it will make sense to Americans and help all Americans. ”

Longtime business partners are preparing their own countermeasures. Canada has already imposed some in response to the 25% prices that Trump has linked to fentanyl traffic. The European Union, in response to steel and aluminum prices, has put taxes on 26 billion euros ($ 28 billion) of American goods, including Bourbon, which prompted Trump to threaten a 200% rate on European alcohol.

Many allies believe they have been reluctantly trained in a confrontation of Trump, who regularly says that friends and enemies have essentially waged the United States with a mixture of prices and other commercial barriers.

The reverse of the medal, of course, is that the Americans also have income to choose to buy creators dresses by French fashion houses and cars of German manufacturers, while World Bank data Show that the EU has lower income per capita than the United States.

“Europe has not started this confrontation,” said the president of the European Commission, Ursula von der Leyen. “We do not necessarily want to retaliate but, if necessary, we have a solid plan to retaliate and we will use it.”

Because Trump has excited his prices without providing details, he provided a deeper feeling of uncertainty for the world, a sign that the economic slowdown could possibly extend beyond American borders to other nations that would see a person to blame.

Ray Sparnaay, Managing Director of I Fixture & Tool, a Canadian and business tool that is through the Detroit river, said that uncertainty has crushed the capacity of his business to make plans.

“There will be prices implemented. We just don’t know at this point,” he said on Monday. “This is one of the biggest problems that we have probably had the last – well, since November – is uncertainty. It has essentially slowed down all of our citation processes, the cases we hope to guarantee have been blocked. ”

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The journalists of the Associated Press, Lisa Mascaro, in Washington and Mike Householder in Oldcastle, Ontario, contributed to this report.