Trump Unveils Trade Policy Featuring Reciprocal Tariffs, Promises 'Fairness and Prosperity'

On Monday (local time), American President Donald Trump unveiled the US foreign policy that is grounded in mutual tariffs and fairness. Trump lamented that Americans were unfairly treated by other countries and pledged to make America a level-playing field for US workers.

Taking to X, Trump said, “On Trade, I have decided, for purposes of Fairness, that I will charge a RECIPROCAL Tariff meaning, whatever Countries charge the United States of America, we will charge them – No more, no less!"

As part of his revamped protectionist trade policy, Trump said his administration would consider countries using the VAT system, which he said was far more punitive than a tariff, to be similar to that of a tariff. “Sending merchandise, product, or anything by any other name through another Country, for purposes of unfairly harming America, will not be accepted," he said.

Furthermore, he will also make a provision for subsidies provided by countries in order to take “economic advantage" of the US, along with provisions for non-monetary tariffs and trade barriers some countries charge to “keep our product out of their domain".

“Likewise, provisions will be made for Nonmonetary Tariffs and Trade Barriers that some Countries charge in order to keep our product out of their domain or, if they do not even let US. businesses operate. We are able to accurately determine the cost of these Nonmonetary Trade Barriers," he said on X.

The US President called the system “fair to all" and said if a country feels that the US is charging too high a tariff, all they would have to do is to reduce or terminate their tariff against America. “There are no Tariffs if you manufacture or build your product in the United States," he said.

“This System will immediately bring Fairness and Prosperity back into the previously complex and unfair System of Trade. America has helped many Countries throughout the years, at great financial cost. It is now time that these Countries remember this, and treat us fairly – A LEVEL PLAYING FIELD FOR AMERICAN WORKERS," he said.

As per Trump, he has instructed his U.S. Trade Representative (USTR), the Secretary of State, the Secretary of Commerce, and the Secretary of the Treasury to do all that is needed to apply the reciprocal policy to the US trading system.

Trump imposed reciprocal tariffs on all US trading partners, hours before he was scheduled to meet Prime Minister Narendra Modi at the White House. “We will charge them no more, no less. They charge the US tax or tariff, and we will charge them the exact tax and tariff, very simple," he said.

Reciprocal tariffs were a central campaign promise of Donald Trump, aimed at targeting nations that tax American goods and to correct what he described as unfair trade practices.

While announcing the reciprocal tariffs, Trump said that India has more tariffs than nearly any other country. He said India is a “hard place to do business" because of their high tariffs. India is now facing high US tariffs on many labour-intensive goods like textiles, garments, and footwear.

Implementing retaliatory tariffs would come with a significant tax increase, and an American consumer base and businesses would bear a heavy burden, especially considering the $4.1 trillion worth of US imports last year. The move would also most likely trigger retaliatory tariffs by US trading partners, which would disrupt global markets and affect United States relations with allies as well as competitors.