Trump Signs Memo to Impose Reciprocal Tariffs

What Happened?

President Donald Trump signed a memorandum Thursday to impose sweeping reciprocal tariffs across the board on all major U.S. trading partners, including allies.

The move calls on Trump's official global trade representative Jamieson Greer and Commerce Secretary Howard Lutnick to assess within 180 days on a country-by-country report, according to reports.

Trump views the measure as 'fair' by eliminating any trade imbalances despite the possibility of triggering a broader economic trade war.

'I’ve decided for purposes of fairness that I will charge a reciprocal tariff,' Trump said in the Oval Office Thursday. 'It’s fair to all. No other country can complain.'

White House Senior Counselor Peter Navarro reportedly said major exporting nations had created a 'pernicious, trillion-dollar' trade deficit with the U.S., singling out the European Union.

'No wonder Germany sells eight times as many cars to us as we do to them,' Navarro added. 'President Trump is no longer going to tolerate that.'

The anticipated tariff revenues would help balance the expected $1.9 trillion budget deficit.

Why it Matters

Trump recently announced actions surrounding a 25% flat tariff raise on steel and aluminum imports 'without exceptions or exemptions.'

That decision, set to take effect March 12, pivoted from Trump's previous 10% rate in hopes of aiding the struggling industries in the U.S.

'It’s going to mean a lot of businesses are going to be opening in the United States,' Trump recently said in the Oval Office.

China previously announced a series of retaliatory tariffs on the U.S. that took effect on Feb. 10.

The leaders of Mexico and Canada are on a one-month pause from enduring a 25% tariff levy after cooperating with various border reinforcement measures.

Experts have reportedly warned however that these actions will largely be passed through to U.S. prices.

'Tariffs are taxes — bad for business, worse for consumers,' European Commission President Ursula von der Leyen said Tuesday in a statement.

Trump has recently followed many tariff moves from his previous term which involved Section 232 of the Trade Expansion Act.

EU allies previously reached a deal under the Biden administration to roll back tariffs on about $3 billion of American products in 2021.

'If the United States leaves us no other choice, then the European Union will act together as the largest market in the world,' German Chancellor Olaf Scholz said in a statement.

Trump has acknowledged short-term pain but has stood by 'the United States has been ripped off by virtually every country in the world.'

'America has helped many countries throughout the years, at great financial cost. It is now time that these countries remember this, and treat us fairly — A level playing field for American workers,' Trump stated on Truth Social.

How it Affects You

Researchers say if Trump's 25% tariff plans persist with Mexico and Canada, a tax hike of more than $1,200 per year could impact the typical American household.

Reciprocal tariffs would likely increase that amount.

The president has said he's committed to bringing significant investment back to the U.S., through his method of using tariffs.

Americans hope to be eased amid the pressure of growing inflation despite worrisome trends behind consumer prices marking the long road ahead.