To impose the new tariffs, the president declared a national emergency, citing the annual merchandise trade deficit that the United States has run each year since 1975.
“For decades, our country has been looted, pillaged, raped and plundered by nations near and far, both friend and foe alike,” Trump said. “But it is not going to happen anymore.”
The tariff increases that the president announced had little modern precedent and would erect towering impediments to products from dozens of foreign countries, many of them poor nations that embraced exporting as a tool to escape grinding poverty.
American importers, for example, will pay an additional 34 percent tariff on products from China, some of which already face 45 percent fees. Vietnam, which the administration says has become a transshipment point for Chinese companies seeking to dodge U.S. tariffs, will see its goods hit with a new 46 percent tariff. Cambodian goods, likewise, will be charged an additional 49 percent levy.
High tariffs and a range of other practices, including currency manipulation, value-added taxes, and product safety regulations explain why the United States buys so much more from the rest of the world than it sells to foreign customers, he said during a Rose Garden ceremony featuring hard-hat clad union workers, lawmakers and journalists. Erasing these persistent imbalances in global trade, which have hollowed out factory communities and weakened national defense, is now official U.S. policy, according to an executive orderthat the president signed on Wednesday….
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The early reaction from mainstream economists and business groups was grim, while industries that will enjoy new protection against foreign competition applauded. Although Trump’s announcement came after financial markets had closed, premarket trading pushed U.S. financial markets sharply down late Wednesday.
“In the short run, the effect is probably a recession. It’s going to raise the price of so many goods that can’t be made in the United States,” said economist Brad Setser of the Council on Foreign Relations. “In the long run, it’s a vision of the U.S. that is very isolated from the world.”
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As corporations moved their factories offshore, they and their Wall Street investors profited while blue-collar communities in the heartland suffered.
By imposing taxes on foreign goods, Trump hopes to encourage manufacturers to move their overseas factories to the United States. Critics say the president’s policies will help some industries while hurting others that rely on foreign parts….
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As the president has amped up his attacks on U.S. trading partners, public opinion has swung against him. In a February Gallup poll, Americans by a margin of 81 percent to 14 percent called foreign trade more of an economic opportunity than a threat….
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Trump’s goal is to “create an environment where we’re back to where we were before World War I,” said Newt Gingrich, former GOP House speaker. Trump believes the late 19th century was when “we were the strongest economy in the world, largely built around a high tariff, high wage, high manufacturing economy,” Gingrich said….
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