Has a surprise announced what the ‘Day of Liberation’ announced?
Yes and no. In the summer of 2023, The Washington Post He brought an article to his cover indicating that Trump had already outlined a plan to put a tariff of at least 10% to all PRouters that enter the country. The defense of tariffs has then been a constant, also in the campaign. So you can hardly say it was unexpected. But the markets, the analysts and the world governments hoped that there would be more barking than bites, and that what was lived in the first mandate would be reproduced. Protect some sectors, make a lot of noise and that Trump sing victory with cosmetic measures. Nothing is further from reality.
Do tariffs affect all products from all countries?
No. There are a number of exemptions, at least for now, to pharmaceutical products, which are one of the president’s obsessions. The semiconductors, although they are also a recurring product in the complaints of the administration, which does not understand why they must depend on South Korea or Taiwan. Wood, some metals and especially “Minerals not available in the US”. In addition, the White House has not convictedly explained why Russia and Belarus, such as Iran, Cuba or North Korea, are not on the lists and if that means that they are the only exempt, although the bilateral exchange is very low by the sanctions imposed.
Are they truly “reciprocal”?
No, at all. The American administration has invented a formula without any scientific value to arbitrarily determine which considers that other countries ‘charge’ American products. It does not take into account, despite what they say, or local tariffs, or bureaucratic obstacles. It is totally false, so the battery imposed by Trump is not reciprocal. In addition, even countries that have commercial deficits with the US are punished with 10%.
Is China the most harmed country?
Yes and no. The “reciprocal” tariff (sic) announced on Tuesday amounts to 34%, much higher than that of the EU because its commercial deficit is even larger. But that has to add the 20% surcharge that Trump had already applied since he swore the position, which places them in 54%, since they are the only ones that accumulate. But if what Trump already put in 2016 is also added, and that Biden did not correct at all, the amount is of more than 75% to each good that reaches the US. By volume it is obviously the most affected country, but others like Vietnam, which have almost 50% tariff and depend drastically on their exports, will have a lot of worse.
What happens to Washington with the lost islands?
Internet has been filled in the last hours of jokes, parodies and memes, after the lists provided by the White House left 10% tariffs to Heard and McDonald, some Australian islands, near Antarcticainhabited only by penguins and seals. Or that San Pedro and Miquelón, a French territory on the Atlantic coast of Canada, in front of New Scotland, with a few thousand inhabitant, has 99%tariffs, the highest of all. Because? Because they export an ridiculous amount of lobsters to the US. But as they bought just American nothing, since commercial with Canada and France, the commercial deficit is total. And when using the administration an absurd formula, which only takes into account that deficit, is now a crazy surcharge. There are many other islands, that of Christmas, Cocos or Norfork, in Oceania. But to surprise, the surcharge to the so -called British territory of the Indian Ocean, one of whose parts is the remote archipelago of Chagos, which London is about to give to Mauricio. The irony? The largest island, Chagos, houses the Diego García Joint Naval and Air Base, of the United States and the United Kingdom. And it has no native population.
When do these protectionist measures come into force?
Coming soon. Surcharges to vehicles made outside the US began to be applied at midnight from Wednesday to Thursday. At midnight too, but from April 5, the 10% base rate will be applied to all commercial partners. Y On April 9, in a week, the badly called reciprocal tariffs, which the Europeans include.
Are they out profitable?
Trump instigated a commercial war by imposing new tariffs on imports of washing machines and solar panels, steel and aluminum and billions of dollars in consumer, intermediate and capital goods from China throughout 2018 and 2019. Except for some exceptions, Biden maintained almost all Trump tariffs in force. That led to a collection greater than before, obviously, but trade fell into the categories of goods subject to tariffs. According to Tax Foundation data, net damage is remarkable.
But, is it possible that they are not applied?
Seeing the background with Donald Trump, everything is possible. With Canada and Mexico he has played the mouse and cat for weeks or months, in this legislature and his first term. Announcing tariffs and suspending them, applying extensions and then clarifying them. So although the rhetoric is very strong, and the White House has insisted this Thursday that they will not turn back, it is not discharged, especially if the market reaction is very strong. In total or partially, with some more exemptions to products or with sales depending on what is bilaterally negotiated. Countries like Israel announced on day 1 that eliminated all tariffs to all American products. He did not free them from a badly called reciprocal tariff of 17%, but could change.
Can anyone stop the government?
There is no simple response. To impose this protectionist round, Trump has invoked the International Emergency Economic Powers Act (IEEPA), just as he has invoked 1798 laws to deport without trial immigrants or emergency laws to send troops to the border. That is why it is to anticipate that the “Day of Economic Independence” also ends before a judge, since IEEP requires that there is an “unusual and extraordinary threat”, and hardly a commercial deficit counts as this. As could hardly justify the expulsion of Venezuelans for the existence of a criminal gang composed of Venezuelans, which is not a foreign power trying to invade. But said that, already differentiated from the other cases, it is complicated for a court to cancel Trump’s decision, because economic policy has much more margin. That is why it would correspond to Congress to act if you want to stop it.
What margin does Congress have?
The debate is interesting. The same Thursday, the Senate approved, with the support of four Republican senators, a proposal by Democrat Tim Kaine against tariffs imposed on Mexico and Canada. The legislation, which would push to withdraw the restrictions thus recovering the legislative some powers granted by the Constitution, but that has been delegating the Executive over time, in any case needs the approval of the House of Representatives, the Low, which also has a republican majority. That is why Trump is pressing one by one to the most critical of tariffs. Senator Kaine himself has said this Thursday that he will launch another initiative to reverse the base rate of 10% to the entire planet. A long and complicated fight.
Does this put pressure on the Federal Reserve?
Very much, even more than before, tight by inflation and with the growing possibility of a contraction or recession. With red markets and the uncertainty triggered, it does not seem ventured to imagine Trump blaming the Federal Reserve, which he reproaches that interest rates do not lower. Powell’s mandate as President of the Expirate in May 2026, but his future is not insured.
How much does Eeuu expect to raise?
Trump’s main advisor in tariff matters, Peter Navarro, said last Sunday that the US would raise up to six billion dollars in the next decade, about 600,000 million a year. Tariffs are imposed on imports that the Customs and Border Protection agency charges when foreign goods cross the border. Money (about 80,000 million dollars last year) goes to the Treasury Department, U is used for federal government expenses. Although in theory Congress has authority to say how it should be used, Trump has made it clear that he wants those resources to finance tax cuts.