White House has confirmed that the Trump administration stands prepared to announce reciprocal tariffs against every country that imposes duties on US imports. This is expected before the Indian Prime Minister Narendra Modi makes his visit Thursday, and it raises fears of an escalating global trade war and potential inflationary pressures within the US.
According to White House spokeswoman Karoline Leavitt, the tariff measures are to be unveiled by President Donald Trump, before the arrival of Modi. Trump had already indicated the possibility of imposing additional tariffs on cars, semiconductors, and pharmaceuticals. House Speaker Mike Johnson also said exemptions may be granted to the automotive and pharmaceutical sectors, although this is yet to be officially confirmed.
This announcement comes on the heels of Monday’s surprise announcement about tariffs being imposed on all steel and aluminum imports, set to begin on March 12. The surprising decision has drawn fire from such countries as Mexico, Canada, and the European Union, with Japan and Australian seeking exclusions. The EU leadership has prioritized negotiations to try to avoid retaliation, but talks covered reinstating tariffs on American products like bourbon and Harley Davidson cycles.
Doubts about inflationary pressures have been heightened, after data released showed consumer prices having risen by basically the highest level in the last 18 months in January. Tariffs on steel and aluminum are expected to raise costs across industries and business leaders have voiced concerns over potentially higher prices to consumers.
Trump imposed a 10 percent tariff on all Chinese goods effective February 4, while delaying a 25 percent tariff on Mexican and Canadian imports until March 4 to allow for border security negotiations. Some trade experts believe that simply imposing reciprocal tariffs would be an arduous and cumbersome task that would essentially require a detailed study of each country’s duty rates. Nonetheless, while concerns about inflation were voiced, Trump’s aides maintained that these earlier tariffs had not led to much inflation and claimed the intent of the policy is to broker a better trade deal for the US.