Trump Says He’ll Impose ‘Fair and Reciprocal’ Tariffs on Trade Partners
President Donald Trump on Thursday said he’s moving forward with a “Fair and Reciprocal” tariff framework that could hike up duties on products sourced from all over the globe.
The Commander in Chief signed a memorandum setting forth a process for determining the rates of new duties on trading partners, which will be informed by the tariffs, sanctions and non-monetary trade barriers that they levy on the U.S.
“The United States is one of the most open economies in the world, yet our trading partners keep their markets closed to our exports,” said a White House fact sheet on the executive action. “This lack of reciprocity is unfair and contributes to our large and persistent annual trade deficit,” which was worth about $1 trillion in 2024.
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During a televised meeting with reporters from the Oval Office, Trump said the tariffs will be “the thing that makes our country really prosperous again,” claiming that revenue from duties will help pay down $36 trillion in national debt. Newly minted Commerce Secretary Howard Lutnick, who stood behind Trump during the announcement, said the administration’s “studies” on the tariff issue should be completed by April 1, allowing the President to take action immediately thereafter.
However nebulous Thursday’s announcement may have been, Trump has indicated he’s intent on moving forward with new tariffs on America’s biggest trade allies—a fact that has worried economists for months in light of already rising inflation. Asked whether he believes hitting imports from around the world with new taxes will raise prices at retail, Trump admitted “there could be some short-term disturbance.”
“Nobody really knows what is going to happen, other than we know that jobs are going to be produced at levels that we haven’t seen before. We know that we think interest rates are going to ultimately be coming down because of things that happen, and they go hand in hand with the tariffs,” he said. “But we think that…the prices for some things, many things, it could be all things…ultimately will go down.”
Wells Fargo analysts disagree, however. In January, the Consumer Price Index (CPI) rose 0.5 percent, putting the annual U.S. inflation rate at 3 percent—one point higher than the Federal Reserve’s 2-percent target. With Trump’s daily policy changes driving uncertainty around the economy, they said the Fed will likely extend its hold on interest rates before considering cuts, perhaps in the fall.
Following the briefing, Trump was slated to meet with Indian Prime Minister Narendra Modi to discuss a range of issues including tariffs. The U.S. is India’s largest trade partner, and bilateral trade between the two nations was worth $129.2 billion in 2024. However, the U.S. takes in far more than it exports, to the tune of a $45.7 billion trade deficit. American imports made up just under 3 percent of the products imported by India last year, according to U.S. Census data.
While Trump has enjoyed a congenial relationship with Modi in the past, he’s also accused India of being a tariff abuser. A White House fact sheet said that India’s average Most Favored Nation (MFN) tariff is 39 percent, compared to the 5 percent MFN rate the U.S. charges for agricultural goods. India also charges a 100-percent tariff on American-made motorcycles.
“India, traditionally, is… just about the highest tariff country. They charge more tariffs than any other country,” Trump said Thursday. “We’ll be talking about that, but again, whatever they charge us, we’re charging them. So, it works out very well.”
“It’s very it’s a beautiful, simple system, and we don’t have to worry about charging too much or too little. But traditionally, India is right at the top of the pack,” he added.
Over the course of the past week alone, Trump has both issued and deferred tariffs on allies and adversaries, sending markets and the supply chain into a frenzy. Not all Republicans are on board with the president’s all-tariff strategy.
Former Senate GOP leader Mitch McConnell this week published an op-ed in the Kentucky Courier Journal proclaiming, “no matter our best intentions, tariffs are bad policy.”
“Republicans ought to be clear-eyed about the full, unadulterated impact of tariffs as we work to restore sound fiscal policy to our government,” he added. “Blanket tariffs make it more expensive to do business in America, driving up costs for consumers across the board.”
McConnell, the longest-serving Republican Senate leader in history and a ballast of the party, has broken with Trump on one of the central tenets of his economic platform, saying broad-based tariffs could have “long-term consequences right in our backyard.”
“In Kentucky, local storeowners are already hearing about their suppliers’ prices going up. One estimate suggests the president’s tariffs could cost the average Kentuckian up to $1,200 each year,” he wrote.
“And it’s not just about rising prices here at home. During the last Trump administration, retaliatory tariffs from trade partners set off a broader trade war that hit wide swaths of American industry, from agriculture to manufacturing to aerospace and motor vehicles to distilled spirits.” Canada has already announced retaliatory measures that will target Kentucky’s whiskey industry, for example.
While McConnell reiterated the importance of free trade, Trump is focused on getting even.
“[I]f a Country feels that the United States would be getting too high a Tariff, all they have to do is reduce or terminate their Tariff against us. There are no Tariffs if you manufacture or build your product in the United States,” he wrote on Truth Social Thursday afternoon.
“For many years, the U.S. has been treated unfairly by other Countries, both friend and foe. This System will immediately bring Fairness and Prosperity back into the previously complex and unfair System of Trade,” he added. “I have instructed my Secretary of State, Secretary of Commerce, Secretary of the Treasury, and United States Trade Representative (USTR) to do all work necessary to deliver RECIPROCITY to our System of Trade!”
