In a flag-draped Rose Garden ceremony, US President Trump announced he will enact a plan at midnight tonight to charge a minimum of 10 percent reciprocal tariffs on a sweeping list of US trading partners the US president said have treated the US “very badly".
Vowing that this will be the start of a “Golden Age of America,” Trump said, “This is our declaration of economic independence. It’s our time to prosper".
“Countries will now be asked to pay for access to the biggest market in the world,” Trump said as he highlighted an expansive list of tariffed nations, with their current fees they charge the US. Trump’s plan is to charge a reciprocal rate of 50 percent of those combined fees.
“For nations that treat us badly,” Trump said, “we will calculate the combined rate of all their tariffs and fees charge them half of what they are charging us. I call this kind reciprocal,” he said.
The top three nations on the list includes China, who currently charges the US a 67 percent tariff, Trump said. China’s tariff will be 34 percent. The EU, who currently charges the US 39 percent will be assessed at 20 percent, he said, while Vietnam, who currently charges the US 90 percent will be assessed at 46 percent.
For the US’ two largest trading partners Canada and Mexico, it appears that those nations will be exempt from the baseline tariffs as well as reciprocal levies for now. The tariffs were delayed on March 6 until April 2 on goods and services that are compliant under the USMCA treaty negotiated by Trump in his first term.
Trump said the reciprocal tariffs are aimed at restoring “US economic fairness.”
For companies that reject the tariffs, Trump said “Terminate your own tariffs, stop manipulating your currencies and start buying American goods. Hopefully, in years to come they will look back and say that Trump did a good thing,” he said.
Trump added, “Today we are standing up for the American worker, and now we are putting America first. If you want your tariff to be zero, build your plant in the US.”
Trump noted that additional details on the trade plan are available in a US Trade Representative report entitled “Foreign Trade Barriers.”
“In many cases the friend is worse than the foe in many cases,” Trump said.
In an earlier interview with MSNBC, Ontario Premier Doug Ford said today that he stands now ready to remove retaliatory tariffs on US. products if Trump were to cancel heavy American import duties on Canadian goods. Mexico has taken a more measured role on tariffs, so far avoiding any retaliatory tariffs until more clarity was made available following today’s announcements.
Trump also said earlier he would impose secondary tariffs of 25 percent on Venezuela, which would go into effect on April 2, against countries that buy oil or gas from the nation. Trump cited “numerous reasons” for the new proposed Venezuela tariffs, citing hostility to the US and an influx of criminals entering the country as the main reasons.
In addition to already announced tariffs on steel and aluminum, so-called “permanent” 25 percent tariff on automobile imports are set to take effect tomorrow, April 3, Trump said when he announced them last week. Auto parts will be subject to 25 percent tariffs one month later on May 3. Estimates on the cost of tariffs on new vehicle costs are reported at $6,250 per car. Steel, aluminum and automobile imports will not be affected by reciprocal tariffs.
Near 4:45 pm ET, S&P 500 futures were down 1.7 percent, Nasdaq 100 futures were off 2.5 percent, while futures on the Dow Jones Industrial Average fell 0.7 percent. Prior to the announcements, the S&P 500 was up about 1 percent, while the tech-heavy Nasdaq was 1.3 percent higher. The Dow Jones Industrial Average was up by 0.8 percent before the press conference.