Donald Trump has once again threatened to impose a wave of tariffs on US imports, stepping up his bid to overhaul the global economic order.
On Thursday, the US president said he plans to introduce “reciprocal” tariffs, ensuring the US imposes the same taxes on its imports from the rest of the world that American goods face in other countries.
“It’s fair to all,” said Trump. “No other country can complain.”
The latest announcement follows a string of others from the Trump administration, promising tariffs on both America’s close allies and economic rivals. But most have yet to be enforced.
Here’s what we know about Trump’s tariffs so far:
What are the tariffs has Trump announced?
No new tariffs were announced on Thursday. Instead, the president ordered his officials to investigate which countries the US should target with import duties.
The White House has previously said it would place a 25% tariff on goods from Canada and Mexico, introduce a 10% levy on Canadian energy exports, and amend duties on steel and aluminum from all over the world.
So far, the only new duty that has come into force under Trump is a a new 10% tariff on goods from China..
What is a tariff and why does Trump want to use it against certain countries?
A tariff is a tax levied on foreign goods imported into a country. The US is currently the largest goods importer in the world – in 2022, the value of imported goods in the US totalled $3.2tn.
Before entering office, Trump threatened tariffs on the US’s three biggest trading partners: China, Mexico and Canada. Specifically, he said he wanted to see a 25% tariff on Mexico and Canada and a 10% tariff on China, until the countries deal with immigrants and illegal drugs coming into the US.
Trump sees tariffs as a powerful bargaining chip – but it comes with a high price.
Trump frames tariffs as a policy that can apply pressure on US manufacturers and importers to produce goods domestically.
“All you have to do is build your plant in the United States, and you don’t have any tariffs,” Trump has said. But the global economy has been intertwined for decades. US farmers, for example, would not be able to produce the number of avocados Mexico produces for many years.
What this means is that importers will probably push the cost of tariffs on to consumers, causing prices to rise.
What is a reciprocal tariff?
On the campaign trail and in the White House, Trump has repeatedly raised the prospect of a wave of “reciprocal” duties: taxing imports from certain countries at the same rate those countries impose on goods from the US.
The president and his allies have pitched this as a great rebalancing of the global economy, which they claim has been tilted against the US for too long.
How will US consumers be affected by the tariffs?
Tariffs on imports often make prices go up.
Canada, for example, is a major exporter of crude oil, while Mexico exports many fresh fruits and vegetables. Mexico is also the largest auto parts exporter to the US. China is a major exporter of chips used in electronics like phones and laptops.
It’s not just the imports that consumers buy directly. When tariffs push up the price of imports, that includes imported materials used to make other products domestically in the US. Higher prices for materials will eventually make their way to consumers.
Americans have been bracing for the impact tariffs will have on prices. In a November Harris/Guardian poll, nearly two-thirds of Americans said they expected prices to go up if Trump implements broad tariffs.
Which federal laws give Trump the power to enact tariffs?
US federal law gives the president broad powers to enact tariffs without congressional approval.
Trump has the power to declare a national economic emergency to enact his tariffs. This would invoke the International Emergency Economic Powers Act (IEEPA), which gives the president the power to manage imports during a national emergency.
Trump can also apply tariffs under section 232 of the Trade Expansion Act, which gives the president power to impose tariffs on certain industries. This is what Trump used in 2018, when he hit Canada, Mexico and the European Union with tariffs on aluminum and steel.
Have a question about Trump tariffs? Wondering how they affect inflation, prices or the economy? We’re here to help. Email callum.jones@theguardian.com and we may answer your question in a future story
Source: US Politics - theguardian.com
