Key Takeaways:

• President Trump is set to impose "reciprocal tariffs" targeting various global trading partners.
• The new tariff plan aims to level the playing field by matching U.S. tariffs with those imposed on American exports.
• Economists warn this could lead to inflation and potential retaliatory measures from affected countries.

President Donald Trump announced on February 13, 2025, plans for sweeping "reciprocal tariffs" that will impact both allies and adversaries, signaling a significant escalation in ongoing trade tensions. The new tariffs will equate U.S. duties on imports to the rates applied by other countries on American goods, ensuring fairness in international trade relations.

In a passionate declaration from the Oval Office, Trump expressed that many nations—including long-standing allies—have been exploiting unfair tariffs against the U.S. Trump criticized the European Union for its “absolutely brutal” trade practices and singled out India for having notably high import duties. "Whatever countries charge the United States of America, we will charge them," Trump stated, underlining a commitment to ensure equal treatment in trade.

The planned tariffs will vary by country and will take into consideration both the tariff rates imposed and non-tariff barriers, such as value-added taxes (VAT), which have increasingly been viewed as impediments to fair trade. Analysts, including those from the Le Monde, suggest that many emerging economies—especially India and Thailand—could face steep increases in tariffs, as these nations often impose higher effective rates on U.S. exports compared to their imports. For instance, India has a weighted average effective tariff of 9.5% on U.S. goods.

Despite Trump's assertive stance, economists have raised alarms regarding the potential for inflation to spike as a direct consequence of these tariffs. As noted by Bangkok Post, while Trump acknowledged that tariffs could push U.S. prices higher, he expressed confidence that those prices might stabilize over time.

Implementing these tariffs represents a substantial logistical undertaking for the U.S. administration and could take months to finalize. The U.S. Trade Representative and Commerce Secretary have been tasked with conducting in-depth analyses to propose new tariffs on a country-by-country basis, with a target date around April 1 for initial assessments. Trump's actions have been characterized as a negotiating tactic, aimed at establishing a more favorable trade environment for the U.S., especially amidst ongoing concerns about recurrent trade deficits exceeding $1 trillion.

Trump's announcement stirred mixed reactions among economists and global markets, with some viewing it as an opportunity for negotiation, while others express concern about the looming risks of a wider trade war and greater economic instability. The new tariffs also reignite debates over the nature of international trade relationships, potentially affecting stocks and the U.S. dollar responses as business leaders and consumers await clarity on forthcoming trade policies.

For further details, visit India Times.