View of the US Capitol in Washington DC through a lens

President Trump announces reciprocal tariffs

Related topics

The administration unveils reciprocal and universal tariffs.


President Trump announced a significant shift in trade policy on April 2, unveiling a reciprocal trade agenda that includes imposing 10% universal tariffs on imported products from all countries. Additionally, country-specific ad valorem tariff rates will be applied to nations with which the United States has the largest trade deficits and those that impose other trade barriers. The 10% tariffs will take effect on April 5, while the higher reciprocal-based tariffs on products from specified countries will be implemented on April 9, 2025. According to the administration, this move aims to address persistent trade deficits and bolster the US manufacturing base by leveraging the International Emergency Economic Powers Act (IEEPA), which grants the president authority to impose economic sanctions and control foreign assets.

The Executive Order outlines exemptions for certain goods from the reciprocal tariffs, including steel and aluminum articles currently subject to 25% tariffs under Section 232, finished autos and auto parts, and imports involved in ongoing Section 232 investigations such as copper, lumber, pharmaceuticals, semiconductors, and critical minerals and energy goods detailed in Annex II. Notably, imports from Canada and Mexico are exempt from the reciprocal tariffs, although goods that do not qualify under the US-Mexico-Canada Agreement (USMCA) remain subject to existing tariffs. President Trump emphasized that the new tariffs are not fully reciprocal, offering discounted rates to avoid undue hardship for certain countries.

 

During a Rose Garden ceremony, President Trump described the new tariffs as a “declaration of economic independence,” asserting that they would enable the United States to prosper by reducing taxes and paying down national debt quickly. He highlighted discounted reciprocal tariff rates for countries such as China, the European Union and Japan. Additionally, effective at midnight, a 25% tariff will be imposed on all foreign-made automobiles. The Executive Order and the auto proclamation provide detailed information on the new trade measures and their implementation.


Summary 

President Trump announced a reciprocal trade agenda that includes imposing 10% universal tariffs on imported products from all countries and higher country-specific tariffs on nations with significant trade deficits. The new tariffs aim to address persistent trade deficits and bolster the US manufacturing base, with exemptions for certain goods and imports from Canada and Mexico.

About this article

Related articles

Pathways to budget reconciliation in 2025

Republicans control the Senate and House, meaning they can proceed with their plans for a budget reconciliation bill anchored by TCJA extensions.

Steps companies should take now to prepare for major tax legislation in 2025

Companies should prioritize their tax planning, advocacy, and modeling now to effectively navigate anticipated major tax legislation in 2025

How to future-proof the global trade function

Master global trade complexities with strategies for integration, technology and ESG alignment. Discover how tax leaders can future-proof trade functions.