By The Sampadak Express
On April 2, President Donald Trump announced a sweeping tariff policy, imposing a minimum 10% duty on nearly all goods entering the United States. Speaking from the Rose Garden at the White House, the 47th President outlined his “reciprocal tariffs” strategy, aiming to address trade imbalances and strengthen American industries.
What Are Reciprocal Tariffs?
Reciprocal tariffs are trade restrictions that one country imposes in response to similar actions from another. Trump explained that the new tariffs would not fully mirror the rates imposed on the U.S. by other nations, but instead would be approximately half of the rates charged to American exports. This, he suggested, would prevent negative consequences for countries affected by the tariffs.
However, a Bloomberg report pointed out that Trump’s administration calculated the tariffs based on existing trade imbalances, rather than matching specific tariff rates or other trade barriers imposed by trading partners.
Key Details of the New Tariffs
10% Tariff on Most Imports: A baseline 10% tariff will be applied to nearly all imported goods starting Saturday at 12:01 am ET.
Higher Tariffs for Major Offenders: Countries with significant trade deficits with the U.S. will face even higher tariff rates.
Exemptions for Mexico and Canada: The new tariffs do not apply to Mexico and Canada, unless the goods in question are non-compliant, in which case they will be taxed at 25%.
Targeted Tariffs on “Worst Offenders”: Specific tariffs targeting major trade offenders will be implemented on April 9 at 12:01 am ET.
Global Application: About 60 countries will be charged tariffs that are approximately half the rate they impose on U.S. goods.
How Do Tariffs Work and Who Pays?
In his announcement, Trump called the move “one of the most important days” in American history, comparing it to a “declaration of economic independence.” He stated that the revenue from these tariffs would be used to reduce taxes and address the national debt.
Tariffs serve three primary functions, according to Robert Gulotty, an associate professor at the University of Chicago’s Department of Political Science: raising funds for the imposing country, redistributing money from consumers to domestic producers, and shifting global market prices.
But who ultimately bears the burden of these tariffs? According to Rodrigo Adão, an economics professor at the University of Chicago Booth School of Business, the impact of the tariffs is felt by U.S. consumers and businesses. Referring to past trade disputes, such as the 2018 trade war, Adão pointed out that American consumers will likely end up paying higher prices for imported goods.
As the new tariffs begin to take effect, global markets and foreign governments will be closely watching the consequences of this bold economic move by the Trump administration.
