WASHINGTON — President Donald Trump is taking additional action to upset the world trade system, with plans to sign an order as soon as Wednesday that would require that U.S. tariffs on imports match the tax rates charged by other countries.
“It’s time to be reciprocal,” Trump told reporters earlier this week. “You’ll be hearing that word a lot. Reciprocal. If they charge us, we charge them.”
The president had suggested that the order would come on Tuesday or Wednesday. But when Tuesday passed without the tariffs being officially announced, Trump was asked if he would sign the order on Wednesday and Trump answered: “We’ll see what happens.”
As Trump has unleashed a series of tariffs after being in power for less than a month, he has fully taken ownership of the path of the U.S. economy. It’s a bet that his economic ideas can eventually deliver meaningful results for voters, even if by Trump’s own admission the import taxes could involve some financial pain in the form of inflation and economic disruptions. For all of Trump’s talk, the impact will likely depend on the details of the tariffs and how other nations respond.
A reciprocal tariffs order could amount to a substantial tax hike to be shouldered largely by U.S. consumers and businesses as the Census Bureau reported that the country had total imports of $4.1 trillion last year. The tariffs could set off retaliatory measures by trading partners that could roil growth around the globe and reset where the United States stands with allies and rivals alike.
By signing the order, Trump would fulfill his long-standing pledge to raise taxes on most imported goods, a clear break with his recent White House predecessors who saw tariffs as either targeted tools to use strategically or barriers worth lowering. Trump has broken with that precedent by saying he wants to return the United States to the 1890s when taxes on imports were the government’s dominant source of revenues.
But should job gains never materialize and should inflation stay high, it’s an easy line of attack for Democratic lawmakers and candidates that Trump helped the ultrawealthy at the expense of the middle class.
“No matter which way you slice it, costs are going to climb for consumers,” Senate Democratic leader Chuck Schumer of New York said earlier this month. “I will work with my colleagues to undo this mess, get costs down and get these billionaires out of the way.”
Trump put 10% tariffs on China over its contributions to the production of the illicit drug fentanyl, and China has taken retaliatory measures. He said he is ready if necessary on March 1 — after a 30-day suspension — to put tariffs on Mexico and Canada over his belief they should do more to fight illegal immigration and drug smuggling.
On Monday, he closed the exemptions to his 2018 tariffs on steel and aluminum, in addition to raising the tariff rates on aluminum. He has also talked about additional taxes on imported autos, computer chips and pharmaceutical drugs.
Many of America’s dominant trading partners are preparing for an economic rupture in reaction to Trump’s possible actions.
