U.S. President Donald Trump on Thursday asked his staff to come up with a plan to slap what’s known as reciprocal tariffs on every country, ally or otherwise, that puts tariffs on American imports.
The president signed a memo ordering his economics team to start working on a plan to slap reciprocal tariffs on global trading partners that are equal to the existing tariffs those foreign countries — like Canada — have on goods from the U.S.
“Whatever countries charge the United States of America, we will charge them. No more, no less,” Trump told reporters in the Oval Office while discussing measures the White House says will strengthen economic and national security.
Reciprocal tariffs refer to tariffs — extra taxes charged on imported goods — where two countries impose similar taxes on each other’s goods. (If your neighbour charged you $5 to borrow a carton of milk, for example, you’d respond by charging them at the same rate when wanted a carton from you.)
It’s a strategy meant to make trading fairer by stopping neighbours, or countries, from taking advantage of another.
Reciprocal tariffs would be separate from the tariffs Trump has already threatened to impose on other nations, such as the ones against Canada.
A White House official who spoke to reporters before Trump’s White House event on Thursday said the administration is also using reciprocal tariffs to offset other trade barriers that slow down the flow of U.S. products to foreign markets, like burdensome regulations, value-added taxes, government subsidies and exchange rate policies.
Trump sees Canada’s general sales tax as a tariff, two senior Canadian government sources told Radio-Canada. The president raised the issue during one of his calls with Prime Minister Justin Trudeau on Feb. 3, to which Trudeau said there are several American states, including Florida, with sales taxes of their own.
Trump’s issue is that Canada has a federal sales tax and the U.S. does not, a third source said.
The president had been expected to introduce reciprocal tariffs on Thursday, but stopped well short of that mark. His memo kicks off what will be weeks or months of investigation into the levies trading partners have imposed on U.S. goods and then coming up with a response.
The National breaks down why the U.S. president is so fixated on Canada. Plus, About That host Andrew Chang explains why Trump wants tariffs on steel and aluminum — again.
Howard Lutnick, Trump’s pick for commerce secretary, said the deadline to finish the studies is April 1.
The White House official told reporters the administration would examine what it called the most “egregious” issues first when considering reciprocal tariffs, including countries with the biggest trade surpluses and highest tariff rates.
Targets include China, Japan, South Korea and the European Union. The tariffs would avoid a “one-size-fits-all” approach for more customized levies, he said, though he did not rule out a flat global tariff.
Canada had a trade surplus of $94.4 billion with the U.S. in 2023. Trudeau has a plan to impose retaliatory tariffs on $155 billion worth of American goods coming into Canada, should Trump’s initial tariff promise come to fruition.
The president threatened 25 per cent tariffs on almost all imports from Canada and Mexico earlier this month. The nations avoided a trade war when their leaders made last-minute deals to postpone the tariffs by 30 days. The agreement involved boosting security at shared borders with the U.S., among other measures.
Trump nevertheless hit Canada’s steel and aluminum industry with the announcement of 25 per cent tariffs on Monday, well before the end of the reprieve. Trudeau said those levies, set to come into effect on March 12, were “unjustified” and “unacceptable.”
Trump said on Monday he was also looking at separate tariffs on cars, semiconductors and pharmaceuticals. On Thursday, he said he was also looking at the extra taxes for cars.
Trump, who campaigned on a promise to bring down prices for Americans, said U.S. consumers could see costs rise in the short term as a result of the moves. The president has long seen tariffs as a way to fuel the domestic economy by making foreign products less attractive.
“Tariffs are great,” he said Thursday.
