In a flag-draped Rose Garden ceremony, US President Donald Trump revealed that he will enact a minimum 10 percent reciprocal tariff plan, effective midnight tonight, targeting a sweeping list of US trading partners whom he accused of treating the US "very badly." This move, Trump declared, marks the beginning of a "Golden Age of America," with the president saying, "This is our declaration of economic independence. It's our time to prosper."
Trump's plan introduces a reciprocal tariff system where countries will be required to pay half of the tariffs and fees they impose on US goods. He explained, “Countries will now be asked to pay for access to the biggest market in the world.” Under this plan, countries that charge the US tariffs will now face a reciprocal tariff rate of 50 percent of their current fees.
Among the top three nations on the list:
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China currently charges the US a 67% tariff, and will now face a 34% reciprocal tariff.
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The European Union, which charges the US 38%, will see a 20% reciprocal tariff.
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Vietnam, which has a 90% tariff on US goods, will be assessed at 48%.
In a notable exception, Canada and Mexico, the US's two largest trading partners, will be exempt from the baseline tariffs and reciprocal levies for now. Trump explained that the tariffs had been delayed on March 6 due to the USMCA treaty, which includes provisions for steel and aluminum.
Trump emphasized that these reciprocal tariffs are designed to restore "US economic fairness". For companies that refuse to comply, Trump urged, “Terminate your own tariffs, stop manipulating your currencies and start buying American goods.” He added, "If you want your tariff to be zero, build your plant in the US."
The president also mentioned additional trade measures:
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Secondary tariffs of 25% on countries that buy oil or gas from Venezuela will go into effect on April 2, citing the nation’s hostility to the US and the influx of criminals as key reasons for these new sanctions.
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The 25% tariff on automobile imports will take effect April 3, and auto parts will face 25% tariffs starting May 3. These tariffs are expected to increase the cost of new vehicles by approximately $6,250 per car.
In the financial markets, the news had an immediate impact, with S&P 500 futures dropping 1.7%, Nasdaq 100 futures down by 2.5%, and Dow Jones Industrial Average futures falling 0.7% by 4:45 pm ET. Prior to the announcements, the S&P 500 had been up by about 1%, and the Nasdaq had risen by 1.3%, while the Dow Jones had gained 0.8%.
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