Trump eyeing $1 trillion in revenue from reciprocal tariffs
What's the story
United States President Donald Trump has signed an executive order to impose "reciprocal tariffs" on international trade, in a bid to reportedly generate $1 trillion in revenue. The new tariff system will mirror the tax rates other countries impose on US imports. "They charge us a tax or tariff and we charge them the exact same tax or tariff—very simple," Trump explained during the announcement on Thursday.
Tariff strategy
Reciprocal tariffs: A country-by-country approach
The reciprocal tariffs will be determined country-wise, considering currency devaluation, non-tariff barriers, etc. This is different from previous blanket tariffs, like the 25% on steel and aluminum. However, critics say this could lead to trade conflicts and economic uncertainty. They also question the feasibility of Trump's $1 trillion revenue target, considering total US imports in 2024 were around $3.3 trillion.
Tariff analysis
Global tariff study and financial impact assessment underway
Commerce Secretary-designate Howard Lutnick and the US Trade Representative have been tasked with conducting a thorough study of global tariffs by April 1. The Office of Management and Budget will then evaluate the financial impacts within 180 days. Critics warn Trump's plan could lead to different tariffs for similar products from different countries, making pricing complicated and possibly raising costs for American businesses.
Trade fairness
Reciprocal tariffs: A response to 'unfair trade practices'
The reciprocal tariffs are viewed as a response to what Trump calls unfair trade practices by other countries. White House press secretary Karoline Leavitt called the policy "the golden rule," stressing fairness in trade relations. She cited the European Union's auto tariff, which is four times higher. Trump has already announced 10% tariffs on Chinese goods, announced duties on all steel and aluminum imports starting March 12, and put a 30-day hold on planned tariffs on Canada and Mexico.