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US President Donald Trump displays plans to hit the exports from countries that, according to him, have unfair trade policies for the United States.
Thursday, Trump signed a service note that asked the staff to develop personalized prices for each country, taking into account characteristics such as their existing prices, their exchange rates, trade sales and other rules.
By describing its concerns, the White House declared that the prices imposed by other countries were not necessarily the biggest problem, distinguishing the European Union for other policies that the Trump administration declared to put American exporters in a disadvantage.
Although large questions remain on the plans, the announcement should launch commercial discussions around the world.
What countries could be affected?
The note signed by the President asked for this staff report a “Trade and reciprocal price” plan within 180 days.
Commerce secretary Howard Lungick said his team would be ready to give a plan to the president before April 1.
Trump has laid his plan for so-called reciprocal prices as part of his efforts to provide investments in the United States and stimulate manufacturing.
“If you build your product in the United States, there are no prices,” he said, adding that “just what was right.”
“In almost all cases, they charge us much more than we charge them, but these days are over,” he said. “It should have been done a long time ago.”
In addition to the European Union, Trump’s measures should have an impact on trade relations with countries like India, Vietnam and Thailand, which have relatively higher prices and rely on the United States As a large market for exports.
Trump signed the note before a meeting with Indian Prime Minister Narendra Modi, who has already taken measures to reduce tariffs on key elements such as motorcycles that Trump made a problem during his first mandate.
In recent days, officials of Thailand and Vietnam have also said that they have been examining trade with the United States.
Before Trump’s announcement, the European Union said it was determined to “maintain a close partnership with the United States”.
“We will continue to seek constructive commitment,” said Olof Gill, spokesperson for the Commerce Commission. “At the same time, we are ready to protect our interests.”
What are the reciprocal rates?
A price is a tax on imports perceived by the government. It is paid by the company that matters good.
Countries generally draw up prices in order to protect certain sectors of foreign competition.
Historically, the United States has defended free trade and kept the majority of its low prices, except on certain products such as shoes and, more recently, steel and aluminum.
The United States has an average rate rate of 3.4%, compared to an average rate of 5% in Europe, according to the WTO.
By establishing its plans, the White House has cited objections at prices such as the 10% tax to which cars manufactured in the United States are confronted in Europe, compared to the 2.5% price that the United States S ‘applies to cars brought to the United States.
The White House has also said that Brazil invoices a price of 18% on ethanol imports, while the United States invoices a rate of 2.5% on the same product.
But officials clearly indicated that the United States intended to use prices to challenge politicians further, citing concerns about the digital services of many countries, including Canada and the United Kingdom, have revealed against large technological companies – many of which are based in the United States – also as European rules for its value added tax (VAT), a kind of sales tax.
What impact could have prices on the economy?
Thursday’s announcement comes after a series of movements related to the prices of the new administration.
Earlier this week, Trump ordered in the United States to start invoicing an import tax of 25% on all the steel and aluminum provided in the country, ending the exemptions for countries such as the Union European, the United Kingdom and Brazil. This should come into force next month.
He also raised prices on all the goods in China at 10% and threatened to strike imports from Canada and Mexico with rights of 25%, a plan that was suspended until March.
Wall Street’s actions increased after no immediate price has been announced.
John Cassidy, Managing Director of Red Cedar Investment Management, said that Trump’s fast shooting tariff chain had annoyed Wall Street, who “doesn’t like the unknown”.
But he warned of excessive reactions, noting that the prices that Trump imposed during his first mandate had a relatively light impact on the American economy.
“I think Trump plays a hand here and I think he has a very strong hand to play.” He said.
However, Alex Durante, an economist at the Tax Foundation, said that there was left to see what changes could result from Trump movements.
He does not think that prices are the best strategy to deal with commercial complaints, given the costs and the uncertainty they introduce for American companies and risks.
“I think we are heading towards more and more prices every week to come and the climbing of a trade war with other countries,” he said.
He noted that Trump, in his first mandate, has moved away from the Pacific Pacific partnership, a free trade agreement that had been intended to solve some of these same problems with the countries of Asia.
“They were open to doing this without having to pass the United States through a more commercial uncertainty,” he said.
Trump rejected concerns about collateral damage, saying that his plans will stimulate long-term manufacturing in the United States.
“What will go up is that jobs will go up,” he said. “Prices could increase a little short term, but prices will also drop.”
But surveys indicate that the American public remains concerned about the cost of living and is not convinced of the advantages of prices, which economists have warned lead higher prices for American companies and households.
A recent survey of the Marquette Law School has revealed that only 24% of respondents think that prices will help the American economy, including just under half of Republicans and only 12% of the self -employed and 4% of the Democrats.
“The question is that these prices will lead to an increase in inflation, higher costs of goods,” said Charles Franklin, director of the survey. “The argument of equity is probably a good argument for the president, but the impact of prices is much more difficult to sell.”
Reports contributed by Tom Espine
