Donald Trump's remarks come ahead of his meeting with Prime Minister Narendra Modi.
Donald Trump has announced that US will soon impose "reciprocal tariffs" on trading partners, opening new fronts in his spreading global trade war. While signing the executive order, the US President said that India has more tariff than any other country. His remarks come ahead of his meeting with Prime Minister Narendra Modi.
PM Modi is expected to meet Donald Trump later on Thursday.(AP File)
Trump said that the reciprocal taxes would apply to all countries with no exceptions. He said US allies were often "worse than our enemies" on trade, as he spoke to the press in the Oval Office about his latest move to shake up US domestic and foreign policy.
"I’ve decided for purposes of fairness that I will charge a reciprocal tariff," Trump said in the Oval Office at the proclamation signing. “It’s fair to all. No other country can complain.”
Trump's poll promise
During election campaigning, Trump had promised: "An eye for an eye, a tariff for a tariff, same exact amount."
For example, if India imposes a 25-percent tariff on US autos, Washington will have a 25-percent tariff as well on imports of autos from India, explained a Nomura report this week.
The consideration of non-tariff factors might shift this calculus.
Who would be impacted?
The politics of tariffs could easily backfire on Trump if his agenda pushes up inflation and grinds down growth, making this a high stakes wager for a president eager to declare his authority over the US economy.
The tariff increases would be customized for each country with the partial goal of starting trade new negotiations. But other nations might also feel the need to respond with their own tariff increases on American goods. As a result, Trump may need to find ways of assuring consumers and businesses that growth to counteract any uncertainty from the possible fallouts from his tariffs.
Trump acknowledged Thursday that US prices "could go up" due to tariffs, but he expressed confidence that they would ultimately ease.
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