Trump Executes Plan For 'Reciprocal Tariffs' on All Countries

President Donald Trump recently ordered the federal government to prepare for responding to countries that levy tariffs on US exports with ‘reciprocal’ tariffs designed to mirror the respective countries’ tariffs.  

“On Trade, I have decided, for purposes of Fairness, that I will charge a RECIPROCAL Tariff meaning, whatever Countries charge the United States of America, we will charge them - No more, no less,” said President Trump via truth social. 

Specifically, Trump’s order directs the Commerce Department and the U.S. trade representative to deliver reports on the steps to be taken to achieve reciprocal trading status. 

However, the reports shall consider factors such as Value-Added-Taxes (VAT), subsidies, and non-monetary trade barriers as tariffs which would be eventually mirrored by the US. 

“For many years, the U.S. has been treated unfairly by other Countries, both friend and foe,” continued Trump. This System will immediately bring Fairness and Prosperity back into the previously complex and unfair System of Trade.

Numerous countries employ a VAT system, whereby goods and services are taxed at each stage of the production process. 

In a VAT system, which nearly all European countries employ, VAT accumulates until the finished product is sold and the purchaser pays the entire accumulated tax rate. 

While exports to the US from Europe are not subject to VAT, imports from the US to Europe are charged VAT according to the importing European country’s rate.

“For purposes of this United States Policy, we will consider Countries that use the VAT System, which is far more punitive than a Tariff, to be similar to that of a Tariff,” stated Trump. 

Trump has repeatedly warned countries trading with the US he will leverage tariffs to ensure fair trading terms. 

Trump also promised, both during his presidential campaign and first days in office, that he will use tariffs against Canada, Mexico, and other countries he feels are “out of line” with the US.

Previously, Trump has boasted about employing tariffs as a negotiation tool to lure countries trading with the US into accepting his preferred trading terms.

Last week, Trump paused plans to impose significant tariffs on Canada and Mexico after they both agreed to invest into immigration enforcement and expand their immigration enforcement operations – areas which Trump believes both countries were neglecting.

Tariffs on Canada and Mexico will be suspended for 30 days, during which Trump’s administration will negotiate with the two countries in an attempt to improve the US’ trading position.