The American president has promised to target countries that charge the American import tax by matching them with a reciprocal rate.
Donald Trump ordered his team to start calculating the tasks in early April – growing fears of a world trade war that could also speed up American inflation.
“On the trade, I decided for equity purposes, that I will charge a reciprocal rate, which means that all the countries invoice in the United States of America, we will charge them. No more, no less, ”he posted on Truth Social.
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It should arouse negotiations with dozens of countries aimed at reducing their prices and their commercial barriers. The United States wanted to reduce its commercial deficit in goods which exceeded $ 1.2 billion (954 billion pounds Sterling) last year.
A White House official said that countries with major American sales surpluses could be targeted first. The first five are China,, Mexico,, Vietnam,, Ireland And GermanyAccording to the US Census Bureau.
Trump’s total trade war
Taken at Donald Trump’s nominal value of reciprocal prices is a declaration of total trade war.
This would perhaps be equivalent to the biggest shock in peacetime for world trade.
By promising to collect import taxes on any nation that imposes prices or VAT on American exports, it follows a campaign promise.
The objective is to process a trade deficit of almost billions of dollars – the difference between the value of American exports and its imports – which, according to him, is equivalent to a tax on American jobs.
In response, he wants to deploy prices to simultaneously relieve the American deficit and – in theory – the price of imports in favor of domestic production.
Its main objectives seem to be the main business partners with which the trade deficit is the highest.
It is a blow for the emerging view to Whitehall that Great Britain could rush into relatively unscathed chaos.
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British government minister Pat McFadden told Sky News’ Hub policy with Sophy Ridge That Great Britain will adopt a “wait and see” approach with regard to prices. He refused to say if the government retaliated.
Last Trump: New prices report a “total trade war”
The United Kingdom could be struck by rates as high as 24% if Mr. Trump undergoes threats to treat VAT as a price, according to Paul Ashworth, chief economist in North America in Capital Economics.
Although some estimates are lower, he thinks that Great Britain would be the most difficult fourth blow, after India (29%), Brazil (28%) and the EU (25%).
This is based on VAT rates combined with existing prices, but the Trump administration also intends to take into account regulations, government subsidies, digital services tax policies and exchange rate policies.
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“Most people would consider VAT as a non -discriminatory tax because it is also applied to the goods produced at the national level, which makes a level field,” said Ashworth.
But the United States still maintains that VAT is a form of discriminatory rate because America applies a much lower average sales tax at the level of the state.
Narendra Modi and Donald Trump in the White House. Pic: AP
Trump also held a meeting with Indian Prime Minister Narendra Modi on Thursday, agreeing to associate with artificial intelligence, semiconductors and strategic minerals.
At a press conference thereafter, Trump said that India had been “very strong on prices” and “it is very difficult to sell in India”, adding: “They will buy a lot of oil and gas. “
India’s pricing rates are the highest, according to the World Trade Organization, with an average rate of 17% for all products, compared to 3.3% for the United States.