Posted on 04/03/2025 7:59:31 AM PDT by george76
The president launched a new chapter in U.S. trade, imposing a 10 percent universal tariff on trading partners and higher reciprocal levies on some..
WASHINGTON—Just 72 days after taking office, President Donald Trump announced on April 2 sweeping trade policy changes, introducing what he called “reciprocal tariffs” for all countries and declaring it “Liberation Day in America.”
For decades, the United States has kept low trade barriers, promoting free trade agreements with minimal or zero tariffs—at least on its part. Those days are now over.
At a White House event, Trump presented a large chart outlining baseline and reciprocal tariff rates trading partners now face in attempts to balance their high trade barriers against U.S. goods. The rates include a flat 10 percent levy, along with additional rates tailored to match each nation’s trade barriers on America.
Trump’s new tariff regime is designed to boost U.S. manufacturing and create American jobs, but the effects on inflation and the short-term and long-term impacts on the economy remain to be seen. Here are seven takeaways from Wednesday’s announcement.
1. 10 Percent Universal Tariffs..
Trump imposed a minimum baseline tariff of 10 percent on imports from all countries. The across-the-board levy will take effect on April 5 at 12:01 a.m. “Foreign nations will finally be asked to pay for the privilege of access to our market—the biggest market in the world,” Trump said.
The president implemented the latest trade measures as he declared a national emergency under the 1977 International Emergency Economic Powers Act, a law that grants the president authority to regulate imports.
Last year, the United States imported approximately $4.1 trillion in goods and services. The White House estimates that new tariffs could generate trillions of dollars over a 10-year period.
2. Reciprocal Tariffs Target Countries With High Barriers..
In addition to universal tariffs, Trump also announced additional reciprocal tariffs on U.S. trading partners who made the “worst offenders” list. These tariffs will be higher to counter partner nations’ non-monetary trade barriers.
The White House announced that the new tariff rates shown in the president’s chart for each country consist of the 10 percent baseline tariff and additional reciprocal levies. These new tariffs will be applied on top of any other existing tariffs.
The additional reciprocal rates will take effect on April 9 at 12:01 a.m.
“We’re kind people, very kind,” Trump said, noting that the United States will only impose half the reciprocal tariff rate that each trade partner nation has been charging.
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“I call this kind reciprocal. This is not full reciprocal.”
According to the list, many of the United States’ top trading partners will now be subject to significant tariffs, including the European Union (20 percent), Japan (24 percent), Taiwan (32 percent), and South Korea (25 percent).
Cambodia will face one of the highest rates of 49 percent. Vietnam will be hit with a 46 percent reciprocal levy, and India a 34 percent reciprocal tariff, on top of the baseline levy.
The president imposed a 34 percent reciprocal tax on China. Treasury Secretary Scott Bessent confirmed to Bloomberg Television that the 34 percent is on top of existing tariffs, bringing China’s total tariffs to 54 percent.
Bessent pointed to various actions instituted by foreign governments, such as currency manipulation, value-added taxes (VATs), and “non-market policies.”
A White House fact sheet outlined many instances of non-tariff barriers.
India, for example, has established duplicative testing and certification requirements in different sectors “that make it difficult or costly for American companies to sell their products in India.” If these barriers were dismantled, U.S. exports would grow by at least $5.3 billion per year.
Officials say countries such as China, Germany, Japan, and South Korea have implemented policies—regressive tax systems and low penalties for environmental degradation—that “suppress the domestic consumption power of their own citizens.” This, the document states, also enhances the competitiveness of their exports.
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The White House clarified that presidential action under Section 232 of the Trade Expansion Act of 1962 on specific goods, such as automobiles, car parts, and aluminum, will not be subject to reciprocal tariffs. These products will instead fall under their specific tariff regimes.
The president is poised to introduce Section 232 actions on copper, lumber, pharmaceuticals, and semiconductors soon, senior administration officials noted. Critical minerals could also be part of this tariff regime.
Additionally, Russia is excluded from the list due to the sanctions imposed over the Ukraine war, which have already effectively halted trade between the United States and Russia.
3. China Faces Steep Tariff Hike..
The United States had the highest trade deficit with China last year, totaling nearly $300 billion. For years, the ruling Chinese Communist Party’s (CCP’s) unfair trade practices, including forced technology transfers, intellectual property theft, and state subsidies, have been criticized by both political parties for threatening American businesses and workers. Additionally, China has been accused of flooding global markets with artificially low-priced exports.
After taking office, Trump imposed a 20 percent tariff on all goods made in China, citing a national emergency related to the ongoing trafficking of fentanyl. To this day, China remains the primary source of fentanyl precursors, which are shipped to Mexico and Canada, where they are processed into the illicit drug and smuggled into the United States.
China will now face U.S. tariffs totaling 54 percent, including the 34 percent reciprocal tariff, bringing it close to the 60 percent rate that Trump threatened Beijing with during his campaign.
“American people are paying a very big price,” Trump said during his Rose Garden speech on April 2, noting that China has taken “tremendous advantage” of the United States for years.
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A White House official told reporters during a call that China uses transshipping to circumvent tariffs, achieving this by using third-party countries including Cambodia, Indonesia, Thailand, and Vietnam.
“The problem with Vietnam is not their tariffs,” the official said. “The problem is everything else they do, including setting up shop for communist China to send us things.”
While other countries may yield, China is expected to resist Trump’s new tariff policies, according to Frank Xie, business professor at the University of South Carolina Aiken.
“China is the source of globalization. Other countries will cave in, but China is unlikely to do that,” he told The Epoch Times. “This allows Trump to take care of other countries and then focus on China.”
4. Canada, Mexico Omitted From List..
Canada and Mexico have been excluded from the new reciprocal tariff regime. According to senior administration officials, both countries remain subject to the national emergency that Trump previously declared. The original 25 percent tariff on goods from Canada and Mexico, imposed due to concerns over illegal migration and fentanyl trafficking, will remain in effect. The Trump administration had previously granted exemptions for cars and other goods compliant with the U.S.–Mexico–Canada Agreement (USMCA), but these exemptions expire on April 2, and no extension has been announced.
“At this time, Canada and Mexico, they continue to be subject to the national emergency related to fentanyl and migration, and that tariff regime will persist while those conditions persist, and they will be subject to that regime, and not the new regimes,” one official told reporters before Trump’s announcement.
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The current exemptions for goods covered by the USMCA free trade deal, implemented on March 6, also remain. Canada also previously received a reduced 10 percent tariff on its energy exports, which remains unchanged.
If the fentanyl and border security tariffs are terminated due to a sufficient response from either Canada or Mexico, the two nations will then be integrated into the new tariff regime, the official said.
Canadian Prime Minister Mark Carney, who has vowed to impose countermeasures to Trump’s auto tariffs, says global reciprocal tariffs will “fundamentally change the international trading system.”
5. Trump Justifies New Tariffs..
Trump and administration officials have justified the tariffs by emphasizing the need for America to address structural imbalances in global trade to “make America wealthy again” after being “ripped off for more than 50 years.”
“For decades, our country has been looted, pillaged, raped and plundered by nations near and far, both friend and foe alike,” Trump said at the White House Rose Garden event, which was attended by many Republican lawmakers and most of his Cabinet.
“Foreign cheaters have ransacked our factories, and foreign scavengers have torn apart our once beautiful American dream.”
The new measures will help reshore U.S. manufacturing, an industry that has been decimated since the North American Free Trade Agreement (NAFTA), Trump said.
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“Five million manufacturing jobs were lost while racking up trade deficits of $19 trillion,” he stated. “That was the worst trade deal ever made as a result of these gigantic losses.”
The decades-long trade deficit was also cited as a reason for the tariffs. The trade gap—when a nation imports more goods and services from other nations than it exports—reached a record $1.2 trillion last year.
“Chronic trade deficits are no longer merely an economic problem,” Trump said. “They’re a national emergency that threatens our security and our very way of life.”
As to whether countries can negotiate out of the new tariffs, senior administration officials told reporters that “this is not a negotiation.”
“It’s a national emergency,” the official said. “And any country that thinks that they can simply make an announcement promising to lower some tariffs is ignoring the big, central problem of the massive non-tariff barriers and the institutionalization in their trade model to cheat America.”
If countries retaliate, the president has the flexibility to respond to ensure that these efforts are not undermined.
William Lee, chief economist at the Milken Institute, a California-based economic think tank, says that Trump’s “kind” approach, which sets reciprocal tariff rates at half of what other countries charge, is meant to make negotiations easier.
If other countries retaliate, Trump has the option to respond with higher tariffs, Lee told The Epoch Times.
And no other president, congressman, or governor figured out it is a privilege to be about to sell foreign goods in the American market.
We are a stupid people.
Ford is getting in on the enthusiasm with the announcement that for 3 or 4 months Ford vehicles will be sold to the public at the employee discount price.
“no other president, congressman, or governor figured out it is a privilege to be about to sell foreign goods in the American market”
Oh they knew......it was just a really BIG check.
“Ford vehicles will be sold to the public at the employee discount price”
That sounds like nothing more than just another deceitful slimy dealership sales tactic to me.
We live pretty frugally anyway and don't buy much - this will have minimal effect on me.
There’s the long term view and the short term view.
Trump believes that his tariff policy will result in the following:
* trading partners lowering their tariffs on US goods resulting in better and more competitive prices for our products
* encouraging manufacturers to make their products in the USA. This coupled with reasonable regulations and a friendly tax code will ensure that more jobs and products are created at home reversing the mass exodus of businesses
* raising revenue to help address the federal budget deficit
* a tool for reward and punishment on bad actors (e.g. Venezuela ).
Now let’s not idealize this, these are worthy goals but the world is complicated and filled with different leaders whose reactions might not be what we expect. Here are some possible unintended consequences we have to consider:
* some countries will NOT lower their tariffs, instead will prefer to fight a trade war. Which countries, we don’t know yet, but the EU is one humongous block. This stubbornness could result in higher persistent consumer prices at home resulting in inflation not coming down as anticipated and of course, interest rates remaining high.
* supply chain disruptions ( at least in the short term ). Many US industries rely on imported components. Yes, we could source them or make them at home but it’s not going to be instantaneous. We have factors like cost, infrastructure, skilled labor and others to consider. It’s not going to be a quick simple solution, a balancing act between economic, logistical and strategic factors.
* short term economic strain on specific sectors which might lead to some industries facing financial difficulties or God forbid, bankruptcy. The government might have to step in to EASE the strain.
* uncertainty— this can deter investments not only in the USA but worldwide.
And the fly in the ointment are these factors:
* Congress has not yet passed its big beautiful tax cut bill which should encourage businesses to come back and build their factories. We don’t have a huge majority in the House and some Republicans in the Senate are essentially Democrat-lite. When will we see this passed??
* if the stock market continues to be in the doldrums affecting people’s IRAs, inflation and interest rates do not fall as quickly as we want, then we’re looking at the 2026 midterms where Democrats and their compliant minions in the media will make these campaign issues.
Who knows if Trump will still have a majority in Congress come 2026?
Yes, I personally am willing to see long term gain and sacrifice a little for short term pain, but will the majority of voters come midterms?
I hope these unintended consequences don’t happen, and I’ll be glad to be proven wrong.
Then when do you do it? Never?
RE: Then when do you do it? Never?
Well, I am not a trade expert, but there are conservative economists ( like Ronald Reagan, Milton Friedman, Walter Williams, Thomas Sowell ( he is the only one still alive ) ), who were strong proponents of free trade and generally opposed tariffs, even in response to high foreign tariffs. They have written their reasons for doing so. So there’s that.
And then there are those who say that the TIMING of these tariff announcements are wrong. Trump should have waited till Congress enacts the tax cuts and he signs it into law before announcing the tariffs. This view is favored by Trump’s former economic adviser Larry Kudlow and his friend, Steve Moore.
I am not a trade policy expert so, I am watching and waiting to see the consequences of this trade policy. We shall see. In the meantime, my own IRA has tanked nearly 10% the past week.
you think the remaining europeans will go for this? the migrants are all living off jizyah, so they don't care
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EU stubbornness & preferring to engage US in a trade war will also result in higher prices at home in the EU, inflation in the EU & higher interest rates in the EU
how will the remaining europeans feel about this?
the muzzies are all on jizyah, so they don't care one way or another?
SOLUTION: Drop all of their tariffs on American goods, and line up quickly to cut a deal with the U.S.
Switzerland and Israel are already doing it. Vietnam is already starting to negotiate.
Problem goes away. So what is anyone waiting for?
In the case of the EU, I can think of one word — PRIDE!
That’s all I can think of.
Oh, By the way, Trump’s team is not reciprocating in the traditional sense (i.e., matching the duties that trading partners charge the U.S.).
That kind of reciprocity would have been relatively manageable, given that bilateral tariffs are generally low.
Instead, the new tariffs appear to be based on a formula: ~(U.S. trade deficit from xyz country ÷ U.S. imports from xyz country) ÷ 2, with a minimum tariff set at 10%.
Same here. Our biggest impact will be on our investments, which will hopefully be short term.
Problem goes away. So what is anyone waiting for?
In the case of the EU, I can think of one word — PRIDE!
That’s all I can think of.
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EU’s own DS corruption?
And when will the congress actually get to the budget/tax bill? Because some pols want to phone in their votes because they have a new child or the cat is sick we have to wait another week to work on taxes/budget.
Fine, time for our troops to leave Europe and let them fend for themselves.
Bookmark
I'd say it's more arrogance than pride. That Euroscum has no pride. But they are arrogant as hell.
Fine, time for our troops to leave Europe and let them fend for themselves.
Absolutely. Time for Europe to cancel their F-35 orders, too. We don’t want those good American export jobs.
The Euros are p.o.ed because they bought and paid for No-Tariff US Exports thru 2028 and the Democrats didn’t deliver. Money down the drain.
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