Commerce Department to evaluate barriers to US goods, by category, by nation, to determine “appropriate” reciprocal tariffs. The evaluation will include “non-tariff barriers”, like VAT charged on US goods. For years, the “big three” have been crying about the “non-tariff” barriers Japan imposes on US built cars. Those “non-tariff” barriers include compliance with Japanese safety and emissions regs, same as the US requires for importation here. Japan also requires cars sold there to be right hand drive, something the big three refuse to produce, so US cars imported to Japan need to go to a custom shop to be converted to RHD, one at a time, at major expense. Maybe Farley will get the protection from Japanese and Korean cars he has been crying for? On the other hand, some 70% of the Japanese brand cars, and roughly 50% of the Korean brand cars sold here are built here. So Farley will probably still be crying.
Delayed implementation will undoubtedly lower the short-term impacts, especially for markets, with stocks rising Thursday afternoon as it became clear these duties wouldn’t go into effect immediately.
Really - markets don’t look ahead as far as April 1st?
Trump’s memo Thursday outlined how non-tariff barriers, such as the VAT, would also be subject to reciprocity. “For purposes of this United States Policy, we will consider Countries that use the VAT System, which is far more punitive than a Tariff, to be similar to that of a Tariff,” Trump posted to Truth Social on Thursday.
Can anyone follow this reasoning? VAT applies to any good, whether manufactured in country or imported - why would it be seen like a tariff?
Are you familiar with Calvinball from the Calvin and Hobbes cartoon? Imagine Calvin as the leader of the free world randomly announcing new rules at random times day or night, that impact free trade in a very real sense all over the world. You wake each morning to find out if the rules for the day, worldwide, are broad tariffs or targeted tariffs, or reciprocal tariffs, or imaginary negotiation tariffs to be withdrawn at a whim.
How forward looking can the markets be when a 4 year old cartoon character has the power to change the rules that govern free trade worldwide whenever he wants?
The desire for tariffs seems to me is simply a method to continue to burden those with the least resources with the most responsibility to finance our government. Tariffs cause rising prices on all consumer goods, creating inflation. Those with the least resources spend the most. The other advantage is income taxes can be lowered or remain the same.
Thanks, yeah, I was wondering whether there perhaps was more to it than living in arbitrary world, where mud keeps getting thrown against the wall to see what sticks, and, of course, might-makes-right
He is going to use tariffs as justification for the tax cuts he wants. He will lie about how much money the tariffs will bring in, and he will lie about how the foreign companies pay the tariff, not the American end user. When the economy tanks, he will lie and blame it on the previous admin. The dude lies a lot, but it works. A sizeable portion of the population believe everything he lies about. A small but powerful portion of the population don’t believe what he’s saying, but they don’t care, as they will make out like bandits, while the large portion of the populace “feel” the coming austerity.
Public display of ignorance AND stupidity. He failed econ AND business, so this is not a big surprise. Based on this claim (VAT is tariff), other countries can now cite STATE SALES TAXES (plus the Internet sales tax) as tariffs and thus raise their own tariffs appropriately (100+% might be a good starting point). In other words, choke US exporters markets by making them far more expensive relative to other sources of similar products.
