Trump Announces Reciprocal Tariffs
What are the new tariffs US President Donald Trump is imposing and how might countries respond?
Donald Trump announced that the US will implement reciprocal tariffs. “Whatever countries charge the US, we will charge them, no more, no less”.
Trump’s executive action set the tariffs in motion, but their implementation was deliberately delayed, giving other nations a window to negotiate new trade terms with Washington, according to a White House official.
He had already threatened to impose tariffs on Canadian and Mexican goods, but early concessions staved off a trade war with its neighbors—at least for 30 days. China, however, was not so lucky.
Trump’s tariff strategy on China relied on Section 232 for steel and aluminum, framing the move as a national security imperative. For broader measures, he invoked Section 301 of the Trade Act of 1974, targeting China’s trade practices under the banner of unfair competition.
The administration imposed a sweeping 10% tariff on Chinese imports, though not everything was caught in the dragnet.
Exemptions were made for select consumer electronics, cultural products like books, films, and posters, as well as artistic media—phonograph records, photographs, microfilms, microfiche, tapes, and news wire services. These carve-outs, however, were outliers.
The majority of Chinese imports remained subject to the additional levy, compounding existing tariffs, particularly those from the Section 301 investigation. By mid-2019, that probe had already ratcheted up duties to 25% on $250 billion worth of Chinese goods, tightening the screws on Beijing’s export machine.
When dealing with Canada and Mexico, the administration similarly used Section 232 to justify initial tariffs on steel and aluminum, citing security concerns.
Beyond that, Trump expanded his toolkit by leveraging the International Emergency Economic Powers Act (IEEPA), a statute designed to counter extraordinary threats to national security, foreign policy, or economic stability. This approach allowed for more expansive economic measures beyond conventional trade remedies.
As I mentioned in the exclusive Pantheon Insights podcast, China retaliated - rather predictably - with export controls on critical minerals. This has been and will likely continue to be the modus operandi of Chinese economic warfare.
See my previous reports on trade wars and the outlook for Trump’s presidency here:
Trump Sanctions Hit Iran: Russia and Venezuela Next?
Since Donald is averse to reading whose telling him about the different acts to refer to?