In the spring of 2018, US President Donald Trump announced a series of apply tariffs on foreign nations. He recently put a new baseline tariff of 10% on all imports, starting with China. The tariffs are set to go into effect at 12:00 am on April 5, 2023. Beginning April 9, countries and sectors will be subject to increased rates. Interestingly, pharmaceutical products will be excluded from these new tariffs.
These newly rolled out tariffs will be country and sector-specific, varying from 10% to 20%. The tariffs are intended to offset at least half the average tariff rates that foreign countries charge on American exports. This strategy is intended to be a bulwark against what the administration deems to be very destructive, unfair trade practices.
Tariffs will be placed on countries designated as the “worst offenders.” These tariffs will be significantly lower, with initial rates being set at around 50% of their current average rates on US goods. From the announcement, we learn that Cambodia will receive the highest tariff of 49%. Vietnam is a distant second with a 46% tariff. Sri Lanka will pay a 44% tariff. Thailand will incur a 36% tariff, while China will face a combined rate of 54%—34% plus an existing 20% fentanyl tariff.
Taiwan and Indonesia are next highest with additional tariffs of 32%, with India facing a 26% tariff. These measures are still steps in the right direction, as they contribute to a growing effort to protect American industries and curb unfair trade practices.
European Commission President Ursula von der Leyen tweeted on the move, highlighting the EU’s call for fairness and reciprocity in international trade.
“That others are taking unfair advantage of the current rules.” – EU’s Von der Leyen
The choice to tariff these specific products marks a continuation of Trump’s long-term focus on remaking US trade-policy to a more protectionist bent. Specifically, the administration is looking at countries that apply high rates of tariffs. Agriculture Secretary Tom Vilsack said this new strategy will level the playing field for American producers and workers.
Now that the tariffs are in full effect, experts are already predicting their long-term effects on U.S. consumers and foreign relations. Some industry observers argue that the structural change is critical to spurring economic transformation. As others warn, such actions may provoke retaliatory countermeasures from targeted countries, escalating trade tensions even further.