Donald Trump says tariffs are coming. The US president’s message remains consistent. But what tariffs and when? Import taxes have been introduced so quickly and frequently since he took office that it’s hard to keep track, writes the BBC.
Trump has already increased tariffs on imports from China, steel, aluminium and certain products from Canada and Mexico. Higher tariffs on cars are due to take effect this week. Now we wait for Trump to reveal details of his plan for a wider set of tariffs, which his team has been working on for the past few weeks. The White House is calling it Emancipation Day. So what might we find out on Wednesday?
-How much will the tariffs be?-
The White House has not said how high the tariffs might be, although analysts have suggested various possible rates. During last year’s campaign, Trump advocated a 10% tariff on all imports into the US, and has occasionally suggested it could be as high as 20% – and even 60% on imports from China.
After taking office, he floated the idea of “reciprocal” tariffs, suggesting that rates could vary from country to country. “Very simply, if they charge us, we charge them,” he said in February, shortly before ordering officials to develop such a plan.
Almost immediately, the White House complicated matters by saying that its recommendations would consider not just tariffs but also other policies it sees as unfair to American businesses, such as the value-added tax (VAT).
That has caused confusion as businesses and political leaders try to figure out how much the new tax might hit their products — and how the one announced Wednesday will fit in with existing tariffs, such as those on steel and aluminum that Trump has already imposed.
European officials, for example, are bracing for double-digit tariffs on their own exports. Trump said earlier this year he planned to impose a 25% tariff on goods from the European Union.
-Which countries could be affected?-
The Trump administration has not yet confirmed which countries will be affected, though the agency described the announcement as comprehensive. On Sunday, the president said the new tariffs could apply to “all countries,” suggesting a possible return to the blanket tariff idea he championed on the campaign trail.
That dashed the hopes of some countries, such as the United Kingdom, which had hoped to stay under the radar – although many still want to agree some sort of special deal. It remains unclear whether the tariffs will be universally applied or targeted.
Last month, Treasury Secretary Scott Bessent said the effort was aimed at the “dirty 15” – the 15% of countries that make up the bulk of US trade and impose tariffs or other regulations that put US firms at a disadvantage. The US Trade Representative’s office, while preparing the recommendations, identified countries in which it was “particularly interested”.
These were: Argentina, Australia, Brazil, Canada, China, the European Union, India, Indonesia, Japan, Korea, Malaysia, Mexico, Russia, Saudi Arabia, South Africa, Switzerland, Taiwan, Thailand, Turkey, the United Kingdom, and Vietnam.
Trump has directed some of his harshest criticism at historic allies and major trading partners, such as Canada and the EU. “A friend has often been much worse than an enemy,” he said last week.
-What will be the effect of customs duties?-
Customs duties are taxes on imports. Well, the key question is: who will pay?
Technically, the answer is simple: American firms that import goods will be the ones to foot the bill — especially if the White House decides to levy tariffs “immediately,” as spokeswoman Caroline Leavitt suggested Tuesday.
But the higher the tariffs, the more firms will look for ways to offset those costs — whether by switching suppliers, sharing the cost with business partners or raising prices for Americans. Many companies say they are already preparing for that step. But it’s a risky game because if prices rise too much, buyers will simply give up.
This dynamic increases the risk of economic recession – both in the US and abroad, where many companies rely on the US market. Trump says companies that want to avoid tariffs can simply move operations to the US, but that’s not a quick or easy solution, given the high costs of hiring and setting up plants.
When currency fluctuations and possible countermeasures from other countries are factored in, the effects of Trump’s attempt to reset the global trade balance are likely to be felt long after Wednesday’s announcement.
