Donald Trump’s trade advisers are finalizing plans to impose reciprocal tariffs on every country that applies duties on U.S. imports, escalating concerns of a global trade war and potentially worsening U.S. inflation. This move follows Trump’s announcement on Monday to apply tariffs on all steel and aluminum imports starting March 12, which has drawn criticism from Mexico, Canada, and the European Union. Japan and Australia have requested exemptions.
The European Union’s trade ministers are set to meet to determine their response after European Commission President Ursula von der Leyen warned the tariffs would not go unanswered. Germany’s economy ministry emphasized the need for negotiations to avoid a transatlantic trade war, while being prepared with countermeasures.
The tariffs, expected to be imposed on Chinese goods and Mexican, Canadian, and EU imports, have already caused disruption in industries reliant on steel and aluminum. Some U.S. manufacturers express concern over cost increases, while Europe’s steelmakers fear a flood of cheap steel entering their markets.
Economists warn that the tariffs will likely add to inflationary pressures, which have already risen in January, with notable price hikes in gasoline, shelter, and eggs. While the tariffs are seen as a bargaining tool to gain concessions from other countries, the political optics of raising consumer prices could make the administration hesitant to proceed.
White House officials have been tight-lipped about the details of the reciprocal tariffs, with plans possibly being announced later in the week. The structure of the tariffs remains a challenge, as each country has different tariff rates, requiring a monumental effort to match them. Experts suggest the process could become complex, involving thousands of product classifications across numerous nations.
