Trump's tax strategy will have global consequences

 

Trump's tax strategy will have global consequences

US President Donald Trump has just announced import tax rates for a series of economies, the lowest is 10%, the highest is 49%, and for Vietnam it is 46%.

On April 3, US President Donald Trump announced import tariffs on dozens of economies. According to the tariff table, the UK, Brazil, and Singapore will be subject to a 10% tax. The European Union, Malaysia, Japan, South Korea, and India will be subject to 20-26%. China and Vietnam are among the countries subject to the highest tariffs, at 34% and 46%, respectively.

According to Sky News, over the past decades, the issue of tariffs and trade policy has changed little. Trade is largely free and getting freer, taxes are getting lower and the world is increasingly globalized, the British news agency commented.

Developed economies such as the UK and the US have become increasingly dependent on cheap imports, while their manufacturing industries have simultaneously shrunk. This has affected many manufacturing regions in the US and UK.

Sky News suggests that, to some extent, this is where Mr Trump’s “Liberation Day” story begins, with the US president arguing that global free trade has a dark side that needs to be remedied with tariffs.

During his first term, Mr. Trump imposed tariffs on a number of Chinese goods such as steel and aluminum. However, those numbers are nothing compared to what the US President just announced early on March 4.

Since 1930, the United States has never raised tariffs on the world's economies so strongly. According to Sky News, at that time, the tax increase exacerbated the "Great Depression". The British news agency also affirmed that no one can predict the consequences of today's tax increase, but there will certainly be consequences.

“The consequences for globalization, for the US economy, for geopolitics,” Sky News analyzed. In addition, this policy will also affect financial markets, which have been in a state of concern for months related to tax issues.

But this story is not over, in the coming days we will learn more about this policy, such as retaliatory measures from other countries, Sky News added.

Washington is now imposing tariffs on all countries based on the principle of “reciprocity,” Mr. Trump declared, calling it an “economic independence day” for the U.S. The US president confirmed that a 25% global tariff on cars and trucks would take effect on April 3, while tariffs on imported auto parts would begin on May 3.

In a speech at the White House, Mr Trump complained that “none of our companies are allowed to come into other countries”. “That is why we will be imposing a 25% tariff on all foreign-made cars starting at midnight tonight,” he announced. Mr Trump claimed that the new tariffs would usher in a “golden age” for the country, adding that “jobs and factories will come back”.

Importers looking to bring goods into the US from other countries will now face tariffs of up to 54%, based on how the White House calculates US export duties, as well as non-currency trade barriers against countries accused of manipulating their currencies or being “pollution havens”.

The result is a new tariff list that would impose massive tariffs on trillions of dollars of trade. China, America’s largest trading partner, would be hit with a 54% tariff (an additional 34% on top of the current 20% tariff, for a total of 54%), the European Union (EU) would face a 20% tariff, India would be hit with a 26% tariff, Japan would face a 24% tariff, and many other countries would be on the list.

It remains unclear how Mr Trump and the White House calculated these figures. A document listing the tariffs only says that they include factors such as “currency manipulation and trade barriers”.

Mr Trump said Washington would impose “decent” tariffs on all countries, amounting to “about half” of what they tax the US.

“We will strengthen the domestic industrial base” and “break down” foreign trade barriers, he declared, noting that this would ultimately help consumers enjoy better prices.

“Our country and taxpayers have been ripped off for over 50 years, but that will stop,” Mr. Trump concluded, adding that “we will also put America first.”

 

According to Nongnghiep.vn