Just-In: Trump Struck the EU with Tariffs, Considering 10% Tariffs on China Starting Feb. 1

 

On Tuesday (Jan. 21), US President Donald Trump promised tariffs against the European Union and noted his administration was considering 10% tariffs on Chinese imports starting Feb. 1 because of illegal drugs smuggled into the US.

 

His consideration about tariffs on China is because of concerns about the flow of illegal drugs, particularly fentanyl, from China to Mexico and Canada and into the United States. He has proposed 25% tariffs on Mexican and Canadian imports beginning Feb 1. for the same reason.

 

However, the 10% tariff under consideration is far less than the 60% tariff he promised on the campaign trail.

 

 

In addition, Trump said that because the EU and other countries have a worrisome trade surplus with the US, the US would also impose tariffs on EU countries to make US foreign trade fair.

 

Formerly, Trump signed a trade memo on Monday (Jan. 20) demanding federal agencies to finish comprehensively examining trade issues by April 1.

 

This examination includes research on the ongoing US trade deficit, unfair trade behaviors, and currency manipulation by trade partners, including China. Trump's memo requested remedial recommendations, including “global supplemental tariffs” and adjustments of the minimum $800 duty-free exemption for low-value shipments often accused of illegally importing fentanyl precursor chemicals.

 

Nonetheless, Trump did not abruptly impose any tariffs on his first day in office, as was widely expected. Trump's more cautious approach to tariffs pushed US stocks higher, with the benchmark S&P 500 Index rising to its peak in a month. However, Trump's tariffs on China and the EU could reduce growth.

 

William Reinsch, a trade expert at the Center for Strategic and International Studies in Washington, said Trump's cautious approach could be because he wants to ensure the tariff-hike policy has solid legal support and the most desirable outcome.

 

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