U.S. President Donald Trump on Thursday took what could become his most consequential action involving international trade early in his second administration.

Trump, who signed a memorandum calling for reciprocal tariffs, told a group of reporters in the Oval Office that "if you build your product in the United States, there are no tariffs."

The goal is to bring down America's budget deficit, estimated to be approaching $2 trillion.

The president added that the action "is fair to all. No other country can complain."

Trump ordered Howard Lutnick and Jamieson Greer, his picks for commerce secretary and U.S. trade representative, respectively, to lead teams to calculate new import taxes on America's trading partners. To assess the amounts, they are to take into consideration other countries' tariff rates, subsidies to industry, value-added taxes — which are common in the European Union — regulations and undervaluing of currencies.

The EU value-added tax is the "poster child" for unfair trade, Peter Navarro, the president's senior counselor for trade, told reporters on Thursday.

Modi visit

Trump put his signature on the edict just hours before welcoming Indian Prime Minister Narendra Modi to the White House.

India is expected to be one of the countries most affected by the action. India has relatively high tariff and non-tariff barriers on numerous American exports. It has faced pressure from Washington to reduce its 100% tariff on walnuts, the 70% levy on apples and the 60% import tax on dairy products.

Other sectors include smartphones, pork and poultry, and medical devices. India reduced a 100% tariff on Harley-Davidson motorcycles — an iconic brand deeply embedded in the economy of the Midwestern state of Wisconsin — to 50% in 2018.

The two countries announced on Thursday an energy agreement to make the United States the primary supplier of oil and gas to India.

Trump, alongside Modi, at a Thursday evening news conference said he would pave the way for the United States to sell F-35 Stealth fighter jets to India and the two leaders would work to make tariff cuts in order to reduce America's nearly $50 billion trade deficit with India.

"Prime Minister Modi and I agreed we would begin negotiations to address the long-standing disparities," Trump said.

Modi said he and Trump have set a "target of more than doubling our bilateral trade to attain $500 billion by 2030. Our teams will work on concluding very soon a mutually beneficial trade agreement."

In response to a reporter's question about the reciprocal tariffs, Trump confirmed India would also be targeted.

"Whatever India charges, we're charging them," he said.

Source : VOA