The future of Trump tariffs |
President Trump began his second term of office in January by declaring a trade and tariff war against the US’s trading partners. Not only did he raise US tariffs, but he also demanded that they reduce and even eliminate tariffs on their imports from the US.
Ten months down the line, what is the assessment on how successful the US president has been in wresting an advantage for his country? Where are the Trump tariffs headed?
The world had already had a foretaste of President Trump’s unilateral trade action: during his first term, he had raised tariffs on steel and aluminium on the pretext of national security. This time even the pretence of abiding by internationally accepted trade rules is missing. His openly stated aim is to reset these rules.
He contends that during the last few decades, while the US has reduced its import barriers drastically, partner countries have not. As a result, he argues, the US has run up large bilateral trade deficits and suffered de-industrialisation. His stand is that in raising tariffs, he is only bringing them up to the levels of import barriers that prevail in other countries, and hence the term “reciprocal tariffs”.
Under the US Constitution, the Congress has the original powers to impose tariffs, but the laws authorise the president to take actions that may include imposing tariffs to achieve........