- The US president argues that the fresh tariffs aim to reindustrialise the country and fight unfair commercial practices
- ambiguities about customs details origin chaos in the White home and nervousness in financial markets
- Experts inform that fresh tariffs can lead to trade war and crisis in the planet Trade Organisation
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Trump has repeatedly stressed the historical importance of the date for weeks 2 April — the date of introduction of the ‘reciprocal duties’, calling it “the day of the liberation of America” or “the revival of the United States”. Still, hours before the president is to announce fresh fares at a ceremonial ceremony in the Rose Garden, they inactive do not know what to trust on.
Sam Trump argued from the beginning that the rule of fresh customs should be simple: “Whatever they take from us, we will collect from them”. However, over the past weeks, the president, his cabinet members and anonymous administration representatives have presented various and contradictory versions in the media, introducing nervousness on the markets and an almost regular temper swing on Wall Street.
Trade Secretary Howard Lutnick originally announced that each country would receive a separate rate of work corresponding to the average level of duties. Trump, however, said that extra-price trade barriers, specified as VAT in the European Union, would besides be taken into account in setting the rates. Finance Secretary Scott Bessent later suggested that the fresh duties would be covered by "a lousy fifteen", i.e. America's trading partners with the biggest surpluses in exchange with the US.
In fresh days, the Washington Post reported that Trump plans to impose a 20% work on all countrieswhat he originally predicted in the election campaign. The Secretary of State Marco Rubio announced that the fresh duties should supply a fresh basis for the negotiation of bilateral agreements with partners. In fresh times, trade delegations from many countries, including the EU, have been drawn to Washington, D.C., but their members have mostly left for the remainder of their lives without knowing what they can expect.
Form of customs duties not known
According to Trump, the introduction of customs is to "receipt what was stolen from America" by the "use" of the United States by trading partners. It is designed to simultaneously power the budget with trillions of dollars, reducing debt, as well as forcing abroad companies to decision production to the U.S. leading to reindustrialisation of the country, although both of these objectives are contradictory.
As White home spokeswoman Karoline Leavitt announced on Tuesday, Trump is to respond to “decades of unfair commercial practices that have ripped off America and American workers, hollowed out the mediate class and destroyed the heart of the country.”
Nevertheless, on Sunday the Politico portal reported that the definitive form of the duties envisaged has not been determinedAnd inside the White House, there's chaos about it. "No 1 knows what's happening," said 1 of Trump's close advisors quoted by the portal. ‘What will be covered by the duties? Who do we acclaim and at what rates? There are not yet answers to very basic questions," he added.
Regardless of the form of the fresh tariffs, it is expected that they will shake the economy and the global trade system. They can besides be a nail to the coffin of the planet Trade Organization and will lead to a full - scale trade war.
Experts comment on Trump's announcements
As Prof. Kenneth Reinert, a specialist in global trade from George Mason University in Virginia, told PAP, fresh duties will constitute a reversal of logic.
— The rule of reciprocity was at the root of the WTO and its predecessor, GATT, but it was a different kind of reciprocity, where concessions on the 1 hand meant concessions on the other. Trump, in the meantime, wants to rise the duties to the highest level applied by another countries, does not talk about reducing them, says the expert. As he noted, this is simply a long-time favourite concept of Trump's chief trade advisor Peter Navarro.
According to Reinert, specified a policy would be shortsighted due to the fact that it would violate WTO rules — a strategy built in practice by America and acting in its favour — and besides signaled to the planet that the United States is acting in bad faith. The expert estimated that even a 10% increase in customs duties would be a large increase, in fact a taxation imposed on Americans.
— He thinks he's charging fees from abroad countries, but he's actually collecting income from taxpayers from the United States. He believes that this will aid offset the overall trade deficit, which will not happen due to the fact that the overall trade deficit is determined by macroeconomic conditions alternatively than duties and so the overall trade deficit increased alternatively than decreased during his first term," Reinert said. As he pointed out, although duties may encourage abroad companies to decision production to the US, it is simply a long-term process and the end consequence is higher prices for consumers.
Most experts agree. Studies by economists based on experience from 150 countries have shown that duties negatively affect economical growth. Mark Zandi, Moody’s chief economist, stated that Trump's duties can lead to recession. another experts point out that uncertainty can translate into both reducing consumer investment and spending and harming the president's intent to get companies to build factories in the US.
On April 2, it is to be the culmination of the customs revolution of Trump, though not its end. So far, the president has implemented partial 25% duties on goods from Canada and Mexico, 20% on products from China, as well as 25% duties on imported steel and aluminium. On Wednesday, 25 % duties entered into force on products from countries purchasing oil from Venezuela. On Thursday, however, duties on cars and car parts will apply. However, Trump announced further sectoral tariffs — for abroad medicines, wood, and semiconductors.
