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What are reciprocal tariffs, imposed by Trump on countries which ‘looted, raped’ US
Announcing the reciprocal tariffs, Trump said US has been “looted, pillaged, raped and plundered by nations near and far, both friend and foe alike.”
Not sparing even an uninhabited island, US President Donald Trump on Wednesday revealed his reciprocal tariff plan which the world was anxiously waiting for, slapping a baseline 10 per cent tax on imports from other countries and additional varying charges on countries.
Including the 10 per cent universal reciprocal tariff, Donald Trump announced a ‘discounted’ 26 per cent charge on India, 20 per cent on the European Union, 46 per cent rate on Vietnam, 24 per cent on Japan and 36 per cent on China, adding to the 20 per cent tariff he previously imposed on Beijing. Follow Trump tariff news live updates
Announcing the reciprocal tariffs from White House, Donald Trump said for decades, US has been “looted, pillaged, raped and plundered by nations near and far, both friend and foe alike.”
Also Read: How did Russia, Canada, North Korea escape Donald Trump's April 2 reciprocal tariffs?
US President Donald Trump's global tariff bombshell on April 2, termed 'Liberation Day by him, did not spare even the uninhabited Heard and McDonald Islands. The Australian territory in the sub-Antarctic Indian Ocean was slapped with 10 per cent tariffs on all its exports, despite the icy archipelago having zero residents -- other than many seals, penguins and other birds.
What are tariffs?
Tariffs, or customs duties, are taxes imposed on imported goods. These taxes are typically passed on to consumers, raising the cost of the product. For example, if a product valued at ₹100 has a 10 percent customs duty, its price will rise to ₹110.
Tariffs serve as a revenue source for governments and can include anti-dumping duties, countervailing duties, and safeguard duties, according to a news agency PTI report.
Reciprocal tariff meaning
Both reciprocal tariff or retaliatory tariff refer to measures taken by countries to match the hike in duties or high tariffs imposed by trading partners and are used synonymously.
For instance, when the US imposed higher duties on certain steel and aluminum products in 2018, India retaliated by raising tariffs on 29 US products, recouping equivalent revenue.
Also Read | Donald Trump's reciprocal tariffs to kick in from April 5: A 10-point guide
The chart Donald Trump displayed at White House while announcing retaliatory tariffs indicated that India charged 52 per cent tariffs, including currency manipulation and trade barriers, and America would now charge India a discounted reciprocal tariff of 26 per cent. But according to the White House documents, there will be a 27 per cent duty on India.
Why do countries impose tariffs?
Countries impose tariffs to make imported goods more expensive, which, in turn, encourages domestic manufacturing and job creation, a goal Donald Trump aims to achieve by his sweeping actions.
Tariffs also protect local industries from cheaper imports.
What are the negative impacts of tariffs?
Higher import duties can be inflationary, making raw materials or components more expensive for domestic industries. For example, if a local auto manufacturer needs an imported component that isn’t produced locally, the tariff will increase the component's cost, making the final product more expensive for consumers.
This is why Donald Trump's reciprocal tariffs also do not apply to certain goods, including copper, pharmaceuticals, semiconductors, lumber, gold, energy and "certain minerals that are not available in the United States," according to a White House fact sheet.
