Trump Officially Signs Order for Reciprocal Tariffs

President Donald Trump has signed an executive order imposing reciprocal tariffs on US trading partners, including non-monetary policies and value-added taxes (VATs) within the scope of these levies.

The order directs the US Trade Representative and Commerce Secretary to propose tariffs on a country-by-country basis, a process expected to take weeks or months.

Commerce Secretary Howard Lutnick, Secretary of State Marco Rubio, and Treasury Secretary Scott Bessent will study the issue and submit a report by 1 April, after which tariffs could be enforced immediately.

Speaking from the Oval Office, Lutnick informed reporters:

“If [other countries] drop their tariffs, prices for Americans are coming down. Our production is going up, and our costs are going down. Remember, it’s a two-way street — that’s why it’s called reciprocal.”

This move follows recent tariff announcements on China, Mexico, and Canada, though tariffs on Mexico and Canada are paused until 1 March, adding to market uncertainty amidst an ongoing trade war.

Trump’s Reciprocal Tariffs

President Trump has announced new, country-specific import tariffs aimed at countering not only foreign levies on US goods but also non-tariff barriers such as subsidies, regulations, VATs, and currency manipulation that restrict US trade.

Speaking before the announcement, a White House official noted that Trump plans to introduce additional tariffs on automobiles, semiconductors, and pharmaceuticals beyond the reciprocal tariffs at a later stage.

Trump explained in the Oval Office:

“I’ve decided, for purposes of fairness, that I will charge a reciprocal tariff, meaning whatever countries charge the United States of America. In almost all cases, they’re charging us vastly more than we charge them but those days are over.”

While the full text of the directive remains undisclosed, Trump cited the EU’s VAT system as a key example, with Japan and South Korea also under scrutiny for what he perceives as exploitative trade practices.

This sweeping tariff initiative represents Trump’s most ambitious effort to address US trade deficits and perceived inequities in global trade.

His administration has already imposed a 10% tariff on Chinese imports and plans to implement 25% duties on steel and aluminum next month.

Although immediate tariffs were not imposed, the delay is viewed as a strategic move to prompt negotiations, similar to previous dealings with Mexico, Canada, and Colombia.

Trump is open to lowering tariffs if other nations reduce their trade barriers but emphasized that no exemptions or waivers would be granted.

He highlighted that, unlike past concessions—such as exempting Apple from tariffs on Chinese imports to remain competitive with Samsung—this tariff package will apply universally without exception.

Is the International Economy Entering Troubled Waters?

President Trump’s tariff brinkmanship has heightened global economic uncertainty, leaving businesses and consumers anxiously awaiting policy decisions that could redefine US trade relationships.

He pointed out that all he wants is a level playing field for his citizens.

According to Bloomberg Economics, the newly signed reciprocal tariffs are expected to impact less-developed economies the hardest, where duties on US goods are notably higher.

Unlike the universal tariff Trump proposed during his 2024 campaign, this strategy targets individual countries, though a broader global tariff approach remains on the table.

Trump’s announcement came just hours before hosting Indian Prime Minister Narendra Modi, whose country faces significant exposure to these tariffs due to its historically high trade barriers—a frequent target of Trump’s criticism.

The scope of this plan is vast and presents a daunting logistical challenge for the US Commerce Department and Trade Representative, requiring detailed, country-specific analyses of tariff schedules, regulatory policies, subsidies, and fiscal frameworks across nearly 200 nations.

Trump has long condemned the European Union’s 15% VAT and similar consumption taxes in Japan, arguing that US exports face disproportionately high barriers abroad compared to foreign imports into the US.

With this move, Trump aims to level the playing field by raising US tariffs to match those imposed by other nations, potentially ushering in a seismic shift in America’s trade policy and challenging the global trade system it helped establish post-World War II.

Experts Weigh In

Coin Bureau CEO Nic Puckrin urged investors to monitor the Producer Price Index (PPI) as a key indicator of potential inflation ahead of expected trade tariffs from President Trump.

The PPI, which tracks the costs of raw materials and other inputs used in manufacturing, is projected to rise by 0.3%, signaling possible price increases.

BitWise analyst Jeff Park offered a longer-term perspective, suggesting that an intensified trade war could propel Bitcoin to new all-time highs.

Park asserted that the ultimate aim of Trump's tariff strategy is to weaken the US dollar on the global stage—echoing the 1985 Plaza Accord, when the US and four other major economies agreed to devalue the dollar to boost American exports.

Park further noted that while tariffs would have widespread economic repercussions, inflation would hit non-US residents the hardest, prompting them to seek alternative stores of value like Bitcoin.