President Donald Trump on Thursday signed a presidential memorandum outlining his plan to impose "reciprocal tariffs" on foreign countries.
"They put a tax or a tariff on us and we put a tariff on them," Trump said at a news conference in the Oval Office.
The president said that under the plan, the U.S. would treat other countries' non-tariff policies as unfair trade practices that require tariffs in response.
That includes value-added taxes, or VATs, and other practices deemed by the U.S. Trade Representative's office to be unfair restrictions on trade.
Trump said that foreign countries would not be allowed to ship merchandise or other goods into the U.S. through other countries.
He also suggested that additional tariffs, including on auto imports, were in the works, Reuters reported.
"We want a level playing field," Trump said.
A VAT is a consumption tax levied at various stages of the supply chain. They are "trade neutral," the nonpartisan Tax Foundation said Wednesday in a report accusing the Trump administration of wrongly blaming VAT for the U.S.'s lack of competitiveness in Europe.
The tit-for-tat tariffs would not take effect immediately. Trump said Howard Lutnick, his nominee for Commerce secretary, would lead a study to determine the appropriate tariff levels for each affected country.
Lutnick said in the Oval Office that he expected the study to be completed by April 1.
In a Truth Social post sent after the event, Trump said his plan would include provisions for "subsidies" and "Non-Monetary Tariffs and Trade Barriers" that other countries use.
"America has helped many countries for years, at great financial cost. It is time for these countries to remember this, and treat us fairly," Trump wrote.
The new tariffs would follow duties Trump has already imposed on China, Canada and Mexico, as well as on steel and aluminum imports. Trump's tariffs on Canada and Mexico are currently on hold after both countries pledged to crack down on illegal crossings and drug trafficking on their respective borders with the U.S. (Newsmaker)
Source: CNBC
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