Trump Threatens New Trade Penalties, but It Could Be a Hard Bargain

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The White House had already taken action to impose tariffs on imported washing machines before President Trump raised the possibility of a “reciprocal tax” on trading partners. Credit Luke Sharrett/Bloomberg

WASHINGTON — President Trump said on Monday that the United States would soon announce a “reciprocal tax” on countries that take advantage of the United States on trade, including trading partners he described as “so-called allies.”

“They’ll send in their product, and we won’t charge them anything,” the president said during a meeting with mayors and governors to discuss his proposal for rebuilding American infrastructure. “And we send them our product — same product as they’re sending us — and they’ll charge us 50 and 75 percent tax, and that’s very unfair.”

Though the president said more information would be forthcoming as soon as this week, White House officials quickly played down his comments, with one senior administration official saying that the proposal was “nothing formal right now.”

“The reciprocal tax is, simply, what you do to us, we’ll do to you,” the official said.

But when it comes to imposing reciprocal tariffs, trade analysts said the president’s hands were somewhat tied. The relatively low tariffs that the United States charges on many foreign goods were hammered out through decades of bargaining and bartering at the World Trade Organization.

Tariffs charged on individual products in various countries can vary widely. Most countries, especially wealthier ones like the United States, have relatively low tariffs on imports but may have negotiated at the W.T.O. to protect some sensitive industries with a higher tariff.

The W.T.O. might have the authority to overrule the administration should it enact new tariffs, an action that would then allow other countries to raise their own tariffs on American products as a punishment. To substantially raise its tariffs, the United States would most likely have to leave the W.T.O. — a prospect that could damage the American economy given how globally integrated many companies have become.

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Wendy Pettit

Wendy Pettit is a writer for NYT and writes for other publications on her spare time. She lives in Chicago with her husband and her dog Zuko.

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