President Trump is threatening a round of reciprocal tariffs, suggesting the U.S. could tax imported goods at the same level that other countries tax U.S. exports.
Trump says such tariffs would help domestic producers and reduce the nation’s trade deficit. However, economists fear the tariffs could also put upward pressure on prices, making it harder to curb stubborn inflation.
“Long-term it’s going to make our country a fortune,” Trump told reporters in the Oval Office Thursday.
Any new tariffs would follow the 25% import taxes Trump has already ordered on steel and aluminum from other countries and the additional 10% tax he’s imposed on all imports from China.
Trump also threatened taxes on all products imported from Canada and Mexico, but postponed their implementation after the two neighboring countries agreed to take steps on border security.
The burst of new import taxes comes as prices in the U.S. continue to climb faster than the Federal Reserve would like. This week the Labor Department reported that wholesale prices jumped 3.5% in the last twelve months while consumer prices rose 3%.
The U.S. typically imports more from other countries than it sells abroad. Last year, the nation ran a trade deficit of $918 billion, according to the Commerce Department. That includes a record $1.2 trillion goods deficit, which was partially offset by a $293 billion trade surplus in services.
Credit: NPR