Trump announces reciprocal tariffs: Could begin to impose some tariffs “within weeks”

• Sending merchandise through another country to avoid tariffs will not be accepted
• Says he’s decided to charge reciprocal tariffs
• Provisions will be made for non-monetary tariffs, such as tests on cars
• Provisions for non-monetary tariffs will include limitations on trade
• Lutnick will be coming up with numbers equivalent to limitations and other non-tariff barriers
• Other countries can reduce or eliminate tariffs
• Says EU lowered tariffs on cars to 2.5%, so that’s a big win (I don’t believe the EU has announced this)
• We want a level playing field
• Reciprocal tariffs will bring fairness back
• Lutnick: we are going to address each country one-by-one
• Greer: We will look at everything including ‘fake anti-trust regimes’
• Car tariffs are coming soon
• This tariff will be over-and-above steel tariffs, also cars and pharmaceuticals
• Trump: India has more tariffs than nearly any other country
• Prices could go up somewhat in the short term
• Interest rates are going to be going down
• Lutnick: Studies should be done by April 1 and ‘will be ready to go’
• Trump: Canada has been tough on military, not paying enough
• Canada does not have enough military protection
• The EU does not treat the US right on trade
• Expects a lot of countries tariffs to stay the same
• Says he doesn’t expect any exemptions or waivers
• War in Ukraine has to end
• The TikTok deadline could be extended, hopes to make a deal

More to come but the euro has dipped initially on the headlines. It quickly came back as the autos comment indicated that Trump believes Europe has already given something up. The ‘fake anti-trust regime’ comment highlights the power of Silicon Valley in the White House.

Here is a simple primer on how European VATs work.

Statement from the White House:

• Commerce Dept and USTR will “quickly submit” a report detailing proposed remedies on a country-by-country basis
• Could begin to impose some tariffs “within weeks”
• Will examine most-egregious issues and countries with biggest US trade surpluses first
• Not ruling out a global flat tariff
• Annual trade deficit threatens US economic and national security
• Hoping to have discussions with other countries, Trump more than happy to lower tariffs if others want to lower tariffs
• Tariffs will use statutory authorities including Section 232, 301 or emergency economic powers act

As you can see, the market isn’t taking any of these threats seriously. He said “there was nothing” Canada and Mexico could do to avoid earlier tariffs, then delayed them. The market is taking the view that they’re all just negotiating tactics.

This article was written by Adam Button at www.forexlive.com.