President Trump on Monday did not immediately impose tariffs on imports, but urged him to begin considering a wide range of trade issues that could eventually impose taxes on products from China, Canada, Mexico and other countries. He plans to issue an executive order directing federal agencies. In the coming months.
The decision signals that Mr. Trump is taking a more measured approach to fulfilling a key campaign promise to use tariffs to reorder U.S. trade relations. It would also delay, at least for now, ongoing disputes with foreign governments that have vowed to counter Mr. Trump's levies with their own tariffs.
Trump's executive order on Monday directs officials to investigate a wide range of issues, including trade deficits and trade agreements with China, Canada and Mexico. This would tighten the president's ability to impose tariffs on a large number of targets for a variety of reasons, disrupting international supply chains and potentially sparking a global trade war in the coming weeks and months.
The executive order directs federal agencies to investigate unfair trade and currency practices and assess whether foreign governments are complying with the terms of two trade agreements signed by Trump during his first term as president. . The government will also be asked to assess the feasibility of creating an “External Revenue Service” to collect customs duties.
Mr. Trump has also ordered an investigation into tariffs imposed by the United States for national security reasons and special trade exemptions known as de minimis, which allow low-cost goods to be imported into the United States duty-free. . This loophole allowed a large amount of Chinese goods to escape tariffs that Trump imposed on China during his first term. Details of the executive order were first reported by the Wall Street Journal.
Trump has decided to hold off on tariffs for now, but his advisers say he is more confident than ever that he can use them to great advantage.
Officials say the president and his advisers favor a package of policies that includes universal tariffs on foreign goods, higher tariffs on China and another measure that could address trade relations with Mexico and Canada by also imposing taxes on them. are. With that plan.
In his inaugural address on Monday, Trump said he would “immediately begin a complete overhaul of our trade system to protect American workers and families.”
He said the tariffs would cause “huge amounts of money to flow into the Treasury.” “The American Dream will soon be back and thriving like never before.”
Trump has praised the ability of tariffs to support U.S. factories, raise revenue to help pay for tax cuts he wants to enact, and generally serve as leverage in negotiations with foreign countries.
Although control of trade is technically the power of Congress, various trade laws give the president broad authority to issue tariffs. The president can use these to protect U.S. national security, combat unfair trade practices, and respond to various types of international emergencies.
Mr. Trump and his advisers continue to debate the best way to impose tariffs, but believe they have the legal authority to use either method, people familiar with the discussions said. .
Some U.S. manufacturers are worried that the tariffs imposed by Mr. Trump during his first term and continued by President Joseph R. Biden Jr. will help their businesses survive in the face of intense competition from countries such as China. I rate it as helpful. However, economists and many other businesses believe that tariffs could cause economic harm because they would raise the price of imported goods and provoke retaliation from other governments that could harm U.S. exports. It is claimed that there is.
Trump's executive order will keep foreign governments on high alert in the coming weeks as they seek to establish closer ties with the Trump administration and persuade the president not to target their countries.
Canadian officials have drawn up a list of U.S. products they plan to tax in return if they are targeted by Trump's tariffs, including Florida orange juice, Tennessee whiskey and Kentucky peanut butter. Mexico, along with the European Union and other governments, has threatened to impose retaliatory tariffs on U.S. exports.
During his first term, Trump shook up the country's global trade relations by imposing tariffs on foreign washing machines, solar panels, metals and a wide range of Chinese products. These measures nearly doubled the average tariff rate applied to imported goods, but U.S. tariffs remained relatively low by international standards.
Economists have expressed concern about Trump's plan to expand these taxes. They argue that while tariffs can help certain protected U.S. industries, they also have other downsides to the economy, such as higher costs for households and businesses that rely on imported products.
Lydia Cox, an economist at the University of Wisconsin-Madison, called the tariffs “a pretty blunt instrument” in an online forum hosted by the Harvard Kennedy School last week.
There are some potential benefits for industries protected by tariffs, she said, “but they also create a lot of collateral damage in the process.”
