White House is preparing new tariffs on trillions of dollars of imports

White House officials are preparing to impose new tariffs on most imports by April 2, a date that US President Donald Trump has previously called “Liberation Day,” according to The Washington Post.

In his first two months in office, the president has raised tariffs on about $800 billion in imports from China, Mexico and Canada. The tariffs have sent the stock market into a tailspin, raised the risk of a US recession and prompted “retaliation” from trading partners.

Despite the backlash, Trump’s senior advisers are now publicly promising to impose new tariffs on most US trade. A source familiar with the internal planning confirmed to the publication that administration officials are preparing tariffs on “trillions” of dollars in imports.

The prospect of Trump doubling tariffs has alarmed economists and some Republicans in Congress. Other White House allies are concerned about the logistical challenges of a complex “new regime” of import taxes.

“We don’t know exactly what they’re going to do, but from what they’re saying, it sounds functionally like new tariffs on all U.S. imports,” said Joseph Politano, an economic policy analyst at Apricitas Economics, commenting on the potential changes.

The paper said the domestic preparations show Trump “remains steadfast” in his desire to change the global trading order, despite “deepening concerns among allies on Capitol Hill and Wall Street and outright anger from abroad.”

New taxes on other goods could take months of preparation.

Administration officials initially considered grouping all trading partners into three groups: high, medium and low, and assigning them a corresponding tariff rate. But that idea was rejected in favor of calibrating a new tariff rate for each trading partner.

U.S. Treasury Secretary Scott Bessant said on Fox Business on Tuesday that the administration would “look at a wide range of factors when determining tariffs.” The U.S. would assign each country a number from high to low, which would help determine the appropriate tariff rate. He suggested that many of the tariffs would not go into effect because countries would agree to change their own import tariffs before the April 2 announcement.

Trump has previously said the tariffs are needed to encourage companies to move production back to the United States and force foreign trading partners to make concessions.

While many countries protect certain markets with high trade barriers, most developed economies maintain similar tariff levels. The average U.S. tariff, for example, is 2.2 percent. According to the World Trade Organization, Japan’s is 1.9 percent, and the European Union’s is 2.7 percent.

Trump’s reciprocity plan could return the average U.S. tariff to its early 1930s level of about 20 percent. Such an action by Trump would be unprecedented, and many experts say the president does not have the authority to impose such massive tariffs without congressional approval.

Administration officials are discussing what legal authority the president could invoke to impose a reciprocal tariff system, according to one of the sources.

Under current trade law, Trump has the authority to immediately impose some tariffs, such as on goods from China that are subject to an investigation into China’s trade practices in 2018. The Trade Act of 1930 allows the president to impose tariffs of up to 50 percent on goods from a country he believes discriminates against American goods.

Tags: USA