US President Donald Trump has declared a 10% baseline tax on imports from all countries and higher tariff rates on dozens of nations that run trade surpluses with the US. This move is part of Trump’s campaign promise to raise US taxes on foreign goods to narrow the gap with the tariffs other countries unfairly impose on US products.
The new tariffs will hit foreign entities that sell more goods to the US than they buy, but economists warn that this could lead to higher prices for consumers. The tariff revenue will be used to finance tax cuts that analysts say disproportionately benefit the wealthy.
Under the current laws, the power to set tariffs is granted to Congress, but Trump has been using emergency powers to impose tariffs in a more ad hoc fashion. Other countries charge lower tariffs on US goods than the US does, with an average of 2.2% compared to 39% for the European Union and 67% for China.
This move has sparked concerns about its potential impact on global economies and consumer prices. The impact of the tariffs will depend on how businesses respond, but economists warn that consumers could see overall prices rise within a month or two of the tariffs being imposed.
Source: https://www.pbs.org/newshour/economy/how-soon-will-prices-rise-4-questions-about-trumps-reciprocal-tariffs-answered