For decades, Donald Trump argued that the US would have to use duties to boost their economy – many economists predict price increases
Donald Trump’s decision to suspend duties for 90 days has caused relief in many countries, as concerns have been concerned about complete destabilization of the world economy.
The US president imposed 125% duties on imported goods from China, With Beijing responding to 84% tax on US products.
Trump has also imposed high duties on dozens of other countries, which he suspended on Wednesday for 90 days.
He argues that duties will boost the US industry and protect jobs, with the global economy, however, reacting negatively and sinking into chaos shortly after the announcement of commercial measures which are also expected to lead to prices for consumers.
What are duties and how do they work
Duties are taxes imposed on products purchased by other countries.
They are usually a percentage of the value of the product. The 125% duty on Chinese products means that a $ 10 product will be charged $ 12.50 – increasing its total price at $ 22.50.
Companies that import foreign products in the country are the ones that have to pay tax on the state.
The money is collected when imported products pass through the US customs office.
Companies can choose to pass on part or even all the increased costs to consumers.
Why Trump uses the duties
For decades, Donald Trump argued that the US would have to use duties to boost their economy.
He says duties will encourage US consumers to buy more domestic products, increase tax revenue and lead to huge investment in the country.
Trump also seeks to reduce the US trade deficit, that is, the difference between the value of the US buying from other countries and those they export. He argues that America has fallen victim to “exploitation” by “scammers” and has been “looted” by foreign countries.
In addition to duties, the US president has also made other requirements. The first duties he announced during his current term targeted China, Mexico and Canada, demanding that these countries do more to stop the flow of immigrants and illegal drugs to the US.
Trump strongly defends his tariff policy, but many high -profile MPs of the Republican Party have joined forces with opposition democrats and foreign leaders, criticizing the measures.
What duties has Trump announced
Donald Trump’s swearing -in in January, there was a storm of announcements on the imposition of duties, sparking strong reactions as other countries went on to counterattack, threatening with retaliation.
February 1: The US president announces a 25% duty to the exports of Canada and Mexico to the US – and an additional 10% to Chinese products.
February 3: Mexico and Canada end up in agreement with the US to temporarily suspend duties for one month.
Feb 10: Trump announces a 25% duty on all steel and aluminum imports in the US.
March 4: The White House increases the duty to Chinese imports to 20%.
March 5: Trump temporarily relieves automakers from the 25% duty in Canada and Mexico.
March 7: Trump expands the list of products from Canada and Mexico excluded from duties.
March 12: The 25% duties in steel and aluminum are in place.
March 26: The White House announces that on April 2, 25% duties will apply to cars, and later, before May 3, car spare parts.
April 2: Trump states that the US will impose “reciprocal duties” on specific countries and a 10% universal duty on imports from all other countries.
April 5: The 10% duty comes into force.
April 9: Duties are imported into about 60 countries, which Trump describes as the “worst offenders”. It then announces a 90 -day suspension for all countries except China. The “basic” 10% duty applies everywhere except China, which is subject to 125% duties.
April 10: The 84% duty imposed by China as retaliation on American products is in force. The EU announces that it is suspending scheduled tariffs on US imports for 90 days.
Additional measures:
The current discharge from small parcels from China, worth $ 800, ends on May 2. From that time on, they will be subject to 90% or $ 75 per species, which will increase to $ 150 per species after June 1st.
Exceptions:
The Catholic basic 10% duty does not apply to Canada and Mexico, despite initial announcements for 25% on most goods and 10% on Canadian energy. Many exceptions and postponements have been given.
US and China trade relations in numbers
The US currently has a trade deficit with China. In 2024, the US introduced much more than China ($ 440 billion) than the Beijing introduced from America ($ 145 billion).
This creates a commercial deficit of nearly $ 295 billion in favor of China – an issue that has long been causing tension in American politics and economy.
During his first presidential term, Donald Trump imposed significant tariffs on Chinese products, maintained by Joe Biden and in some cases expanded these duties.
As a result, the proportion of imports from China to total US imports decreased from 21% in 2016 to 13% in 2024.
However, China is still exporting a huge volume of products to the US, from electronics such as iPhone to cheap products such as toys and clothes.
Analysts warn that some Chinese products are channeled through other Southeast Asia countries to bypass duties, which means that the actual proportion of Chinese products may have been underestimated.
Will rise prices for US consumers
Many economists provide price increases in a wide range of imported products, as companies are likely to partially or fully or fully cost the increased costs to consumers.
The affected products could include everything from clothes to coffee and alcohol to electronics.
In addition, if imports are reduced, availability will be reduced, leading to even higher prices due to reduced competition.
Also, even American products using imported accessories can become more expensive.
For example, car construction often includes multiple cross -border components between the US, Mexico and Canada before the assembly is completed.
The cost of a car manufactured with accessories from Mexico and Canada can only increase by $ 4,000-10,000 ($ 3,035 £ 7,588) depending on the vehicle, according to analysts by Anderson Economic Group.
This means that consumers are likely to see price increases in many areas, even if they do not buy direct products from abroad.
What has happened to stock markets
Trump’s announcements on duties have caused significant instability in the world stock markets.
Stock markets are the markets in which companies sell their business shares. They reflect estimates of the value of each company in the world and their future profits.
Falls in stock prices affect many people, even if they do not invest directly in shares, due to indirect impacts on pensions, jobs and interest rates.
Stock prices declined sharply after the announcement of global duties because investors believed they would increase costs and reduce profits. However, following the announcement of the 90 -day suspension of duties, markets in the US, Asia and Europe have recovered abruptly.
How other countries reacted to Trump’s decision to suspend duties
For countries included in Donald Trump’s so -called “worst offenders” list, there was a sigh of relief when duties were reduced to 10%.
European Union:
European Commission President Ursula von der Laien said that Trump’s decision was an “important step towards stabilizing the world economy” and that the EU would suspend its own countermeasures for 90 days.
Poland:
Poland Prime Minister Donald Tusk has called on all parties to “take advantage of the 90 -day suspension”, stressing that maintaining strong relationships with the US “is a common responsibility for Europeans and Americans”.
Vietnam:
Vietnam Vice President Ho Duk Fok said the US and Vietnam expect “negotiations on a bilateral trade agreement” that will include tariff agreements.
Germany:
German Chancellor Friedrich Mertz said the suspension proves that the united European commercial approach has a positive effect, adding: “Europeans are determined to defend ourselves.”
Canada:
Canada, targeted with duties of over 10%, imported a 25% duty to some US vehicles on April 9.
Britain:
The British government has not announced its own duties on US products so far, but it is writing a list of US products that can impose retaliation.
Source: Skai
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