‘They charge us, we charge them’: Trump plans new trade tariffs, escalating global tensions

Amid ongoing concerns over the global trade war, US President Donald Trump has made another major announcement that could escalate tensions.

On Friday, Trump stated that he plans to impose additional trade tariffs on multiple countries by Monday or Tuesday of next week.

“I'll be announcing that next week, reciprocal trade so that we're treated evenly with other countries,” Trump said. “We don't want any more, any less.”

He made the announcement during a meeting with visiting Japanese Prime Minister Shigeru Ishiba. However, he did not identify which countries would be hit but suggested that it would be a broad effort that could also help solve US budget problems.

American Imports

The move would fulfil Trump's campaign promise to impose tariffs on American imports equal to rates that trading partners impose on American exports.

According to World Trade Organization (WTO) data, the US trade-weighted average tariff rate is about 2.2 per cent, as compared to 12 per cent for India, 6.7 per cent for Brazil, 5.1 per cent for Vietnam and 2.7 per cent for European Union countries.

The US president told Republican lawmakers of his plans during budget discussions at the White House on Thursday, reported news agency Reuters citing sources.

Trump and top aides have said they plan to use higher tariffs on foreign imports to help pay for extending Trump's 2017 tax cuts, reported Reuters.

At a White House press conference later on Friday Trump suggested that the reciprocal tariffs could come in lieu of the 10-20 per cent universal import duty plan at the centre of his economic message during the campaign.

“I think that’s the only fair way to do it. That way, nobody’s hurt. They charge us. We charge them. It’s the same thing,” Trump said. “I seem to be going in that line as opposed to a flat fee, tariff.”

Last week, Trump announced tariffs of 25 per cent on Canada and Mexico but delayed them after discussions with his Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum Pardo.

The two largest US trading partners agreed to increase enforcement efforts at the border.

Trump administration aims to unveil their ambitious tax and spending package this weekend.