Banca March | In less than 100 days, Trump has imposed the highest tariffs of the last 100 years, increasing the average rate from 2.5% to 24%.
Last Wednesday night, he announced a base global tariff of 10%, which came into effect on Saturday. For those countries with a trade deficit, a higher rate applies, which will begin next April 9th. This is the case for the EU, which from this week will see its exports to the US taxed at 20%. For other countries, the tariffs are even higher: 46% Vietnam, 32% Taiwan, 25% South Korea, and 24% Japan. As for China, the 34% rate is added to the 20 percentage points already implemented on the Asian country during this term, reaching an effective tariff of 74%.
The new rule presents exclusions for certain products and two countries: Mexico and Canada are conducting separate negotiations, having already been impacted by 25% tariffs on goods not covered by the USMCA. The exempt goods include some already tariffed (steel and aluminum, vehicles and their components) and others on which he has threatened without offering further details, such as medicines, semiconductors, copper, or wood. Key products for the US, such as energy, gold, and certain minerals, have also remained immune.
However, the “reciprocal” tariffs are not actually reciprocal. The promise of tariff rates based on matching the levies imposed by trade partners has been discredited. The numbers have little to do with reciprocity, not even when trying to quantify something as ethereal and complex as non-tariff barriers. Instead, the Administration has published a sweetened formula with “learned” Greek letters, which is no more than half the quotient between the trade deficit and imports. The simple calculation leaves a more tedious negotiating framework, as what would be at stake is mobilizing a change in the trade balance that is not under the direct control of governments (as was the case with tariff rates)
