If the US genuinely tries to close its overall deficit with big tariffs all round, it will cause a crunching recession. If Trump discriminates between trading partners, the heavily tariffed ones can nip through the side door of those who escaped more lightly.

Donald Trump’s tariffs are a headache for all his trade partners. But the U.S. president’s plan to impose ad hoc “reciprocal” levies on imports are a particular problem for the European Union. By enabling him to target whichever countries in the bloc he pleases,

President Donald Trump’s shift in policy to reciprocal tariffs is a relief to markets, U.S. consumers and most trading partners.

In an as-yet unpublished Federal Register notice, the Office of the U.S. Trade Representative (USTR) has issued a Request for Comments to Assist in Reviewing and Identifying Unfair Trade Practices and Initiating All Necessary Actions to Investigate Harm from Non-Reciprocal Trade Arrangements.

Here’s what you need to know about reciprocal tariffs and who might be impacted by Trump’s plan. Reciprocal tariffs refer to tariffs—the taxes charged on imported goods—the U.S. government plans to levy against global trading partners that are equal to the existing tariffs foreign countries have set against American goods.

On February 13th Donald Trump announced he had decided, for what he later called “purposes of fairness”, to employ reciprocal tariffs. When the levies will go into effect, and how they will apply, is uncertain.

The president said his advisers would devise new tariff levels reflecting countries’ tariffs, taxes, subsidies and other policies affecting trade with the United States.

In a recent speech at Washington DC, US President Donald Trump said that he plans to impose reciprocal tariff on India soon. The Republican leader said that US was getting ready to do it earlier, but plans were paused due to the Covid-19 pandemic.

Including VAT s in reciprocity would lead to hefty increases in tariffs. Goldman Sachs, a bank, says that if America adopted only mirror-image tariffs without retaliation, its levies would rise by an average of two percentage points. Many European vat rates exceed 20%.

In a move set to upend international trade dynamics, President Donald Trump has declared an aggressive plan to impose reciprocal tariffs on nations he accuses of exploiting the United States with exorbitant duties.