Trump says he will sign reciprocal tariffs order soon as trade war fears mount

WASHINGTON - US President Donald Trump said he would impose reciprocal tariffs as soon as Feb 12 evening on every country that charges duties on US imports, in a move that ratchets up fears of a widening global trade war and threatens to accelerate US inflation.

“I may do it later on or I may do it tomorrow morning, but we’ll be signing reciprocal tariffs,” Mr Trump told reporters at the White House.

Mr Trump’s latest round of market-rattling tariffs comes as Indian Prime Minister Narendra Modi is due to visit the White House on Feb 13.

The Trump administration has complained that India has high tariffs that lock out US imports.

Republican US House of Representatives Speaker Mike Johnson said he believed Mr Trump is considering exemptions that would include the automotive and pharmaceutical industries, among others, but said he was not certain.

Economists broadly see tariffs as an inflation risk, and data released on Feb 12 showed consumer prices increased in January by the most in nearly one to one and a half years.

The president has already stunned markets by announcing tariffs on all steel and aluminum imports beginning on March 12.

That

drew condemnation from Mexico, Canada and the European Union

, while Japan and Australia said they were seeking exemptions from the duties.

The news sent industries reliant on steel and aluminum imports scrambling to offset an expected jump in costs.

The EU will prioritise negotiations over retaliatory countermeasures for now in an effort to avoid a damaging trade war, officials signaled earlier on Feb 12.

An EU government official said ministers considered reinstating countermeasures imposed in 2018 on products like bourbon and Harley-Davidson motorcycles in response to Mr Trump’s tariffs on steel and aluminum.

EU trade chief Maros Sefcovic spoke on Feb 12 with White House national economic council director Kevin Hassett, Commerce Secretary-designate Howard Lutnick and US trade representative nominee Jamieson Greer.

Higher prices

Last week, Mr Trump imposed an additional 10 per cent tariff on Chinese goods, effective Feb 4, with

Chinese countermeasures taking effect this week

.

He delayed a 25 per cent tariff on goods from Mexico and Canada until March 4 to allow negotiations over steps to secure US borders and halt the flow of the drug fentanyl.

Some US workers have welcomed the metal tariffs, but manufacturing firms have warned the hike would reverberate across supply chains and lead to higher prices.

“You can’t change your supply chain overnight, and with the number and pace of these changes, even if you tried to stay ahead of it, can you stay ahead of it?” said Mr David Young, an executive with the Conference Board, a global business group.

Europe’s steelmakers are also worried that US tariffs will lead to a flood of cheap steel into Europe.

Canadian Prime Minister Justin Trudeau, speaking to reporters in Brussels, said some Americans would lose their jobs and US growth would suffer from Mr Trump’s metals tariffs.

Mr Trump trade adviser Peter Navarro downplayed the negative impact of the expected tariffs, telling CNBC that duties imposed during Mr Trump’s first term did not send inflation soaring and that export-dependent producer economies often lowered their prices to prevent losing market share.

Trade experts say structuring the reciprocal tariffs that Mr Trump wants would be difficult.

US officials could opt for a more easily implemented flat 10 per cent or 20 per cent tariff rate, or a messier approach that would require separate tariff schedules matching US tariffs to other countries’ rates, said Mr William Reinsch, senior fellow at the Centre for Strategic and International Studies.

Mr Damon Pike, a trade specialist at accounting firm BDO International, noted that each of the 186 members of the World Customs Organisation had different duty rates.

“It’s almost an artificial intelligence project,” he said. REUTERS