priority
The tariff scheme will include customs duties, value-added tax (VAT) and other barriers. Value-added tax (VAT) will also be considered as a tariff, and action is being considered against countries that have adopted VAT tax regimes. And the practice of transporting goods through other countries (entrepot trade) to avoid tariffs will not be accepted.
1
As noted above, the “reciprocal tariff” policy can target more than just customs duties, including VAT and other aspects. This means that the tariffs are not limited to countries that impose tariffs on U.S. exports, but also countries that impose non-tariff barriers to U.S. goods (including, but not limited to, taxes on U.S. companies, such as value-added taxes (VAT), or restrictions on U.S. companies’ ability to do business there). The US’s indiscriminate imposition of ‘reciprocal tariffs’ on all countries also means that all countries will not be spared from this tariff stick. The first to bear the brunt of the tariffs will be India, Brazil, Vietnam, Argentina, and other countries in Southeast Asia and Africa, which have already imposed tariffs on U.S. exports such as agricultural products and automobiles, and will have to “spit out as much as they take in”. The EU member states are certainly not feeling well either, so much so that they have been protesting and threatening to counteract the previous steel and aluminum % tariffs that have already made the EU very uncomfortable and angry. Trump has made a point of emphasizing that there are no exceptions or exemptions to this tariff, which means that even U.S. allies (e.g., Canada, Mexico) are not privileged. At least, for the time being. It remains to be seen if there will be negotiations at a later stage, and whether the outcome of the negotiations will affect the adjustment of the tariff increase policy.
2
Trump signed a memorandum in the White House that day, said clearly: “In order to be fair, I decided to impose ‘reciprocal tariffs’, which means that no matter how many tariffs other countries to the United States, we will also impose the same tariffs on them, no more, no less”. On the “reciprocal tariffs” specific collection time, Trump signed the relevant memorandum did not specify, signing the memorandum may just be the implementation of tariffs program must go through the government process. However, there are also sources, a White House official said: “Trump wants to act quickly, and implied that it will take ‘weeks’ rather than ‘months’ to realize the implementation of tariff measures.” Trump expects some countries to reduce or end their tariffs to reduce their own tariff pressures as a result of this policy. Perhaps this is one of Trump’s core objectives in pursuing the tariff policy.
3
It is worth noting that Trump’s formal signing of the “reciprocal tariffs” memorandum may mean that his campaign promise to impose across-the-board tariffs of 10 to 20 percent will not materialize. Given Trump’s recent rhetoric and actions, he may prefer “reciprocal tariffs” to “uniform tariffs”. Of course, we can also understand that, perhaps from the very beginning, Trump’s calculation of 10% comprehensive tariffs imposed on the target “only China”, because the 10% is only implemented in Chinese goods. So far, the 10% tariff increase on Chinese goods, the 25% tariff increase on steel and aluminum exports to the U.S., and reciprocal tariffs have all been confirmed to be implemented, except for the “separate tariffs on automobiles, semiconductors, and pharmaceuticals” that Trump had previously emphasized.
However, while the “reciprocal tariffs” have been confirmed, the exact timing and details of their implementation are yet to be confirmed.