President Donald Trump is taking additional 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. 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 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. Multiple Trump aides have privately said that Trump’s long-standing goal with tariffs has been reciprocity. But Trump has also portrayed tariffs as a diplomatic tool to try to force Canada and Mexico to spend more resources on stopping illegal immigration and drug trafficking into the United States. He also suggested repeatedly that tariffs would be a source of revenues that could offset his planned income tax cuts. “Of course, even if President Trump views reciprocal tariffs as an alternative to more sweeping measures at the moment, we are entering only the fourth week of a four-year presidential term and it seems likely there will be many further tariff announcements,” the investment bank’s analysts wrote.