Following weeks of expectations and speculation, President Donald Trump on Wednesday followed his tariff hazards by announcing 10% baseline tax on imports from all countries and 10% baseline tax on high tariff rates on dozens of countries, which run trade surplus with the United States.
Announcing what he has called a mutual tariff, the Trump was fulfilling a major campaign promise by increasing American taxes on foreign goods to reduce the difference with the white house, which says other countries incorrectly implemented American products.
The high rate of Trump kills foreign institutions that sell more goods than purchasing the United States. But economists do not share Trump’s enthusiasm for tariffs because they are one tax on importers that usually pass consumers. However, it is possible that mutual tariffs may bring other countries to the table and get them to reduce their own import taxes.
Associated Press sought your questions about mutual tariffs. Here are some of them, with our answers:
Do US-Educated tariffs go to the General Revenue Fund? Can Trump withdraw money from that fund without any oversight?
Tariffs are tax on imports, when foreign goods cross the US border by Customs and Border Security Agency. Money – Last year approximately $ 80 billion – goes into the American Treasury to help pay out the expenses of the federal government. The Congress has the right to say how the money will be spent.
Trump – Massively supported by Republican MPs who control the American Senate and the House of Representatives – analysts want to use increased tariffs to finance tax cuts that analysts say that Amir will benefit inconsistently. In particular, they want to expand the tax cuts passed in the first term of Trump and are ready to end in the late 2025. A nonpartison think tank in Tax Foundation, Washington, found that the expansion of Trump’s tax deduction will be reduced to $ 4.5 trillion in federal revenue from 2025 to 2034.
Trump wants to help offset the collection by reducing high tariffs. Another think tank, the Tax Policy Center, has said that expanding the 2017 tax deduction will provide relief to Americans at all income levels, “But high-ie houses will get a big benefit.”
How soon will the prices grow as a result of tariff policy?
It depends on how business reacts in both the United States and foreign, but consumers can see the total prices rising within a month or two. For some products, such as production from Mexico, the prices may grow very rapidly after the tariff is effective.
Some American retailers and other importers may eat share of tariffs, and foreign exporters may lose their prices to overcome additional duties. But for many businesses, Tariff Trump announced on Wednesday – such as 20% on imports from Europe – would be huge to swallow on its own.
Companies can use tariffs as an excuse to increase prices. When Trump slapped duties on the washing machine in 2018, the studies later revealed that the retailers raised prices on both the washers and the dryer, even though there was no new duty on the dryer.
An important question in the coming months is whether something similar will happen. Economists are concerned that consumers living through spikes of the largest inflation in four decades are more accustomed to by rising prices than before.
Nevertheless, there are indications that due to an increase in the cost of life, the cost of life, the price is less willing to accept the increase and simply will cut back on their purchase. It can discourage businesses by increasing the price.
What is the limit of the power of the Executive Branch to apply tariffs? Does the Congress not play any role?
The US Constitution gives Congress the power to set tariffs. But in these years, the Congress has handed over those powers to the President through many different laws. Those laws specify the circumstances under which the White House can impose tariffs that are usually limited to cases where imports are threatened to national security or are severely damaging a specific industry.
In the past, the presidents usually imposed only tariffs only after public hearing to determine whether some imports meet those criteria. Trump followed those steps while putting tariffs in his first term.
In his second term, however, Trump has sought to use the emergency powers prescribed in the 1977 law to apply tariffs in more ad hoc fashion. Trump has said, for example, that Fentanile, who flows from Canada and Mexico, has formed a national emergency and used that excuse to implement 25% of duties on goods from both countries.
The Congress may try to cancel an emergency that a president announced, and Sen Tim Cin, a Democrat, Virginia, has proposed to do so about Canada. This law can pass the Senate but will possibly die in the House. Other Bills of the Congress which will also limit the President’s right to determine the tariffs, as well as face difficult obstacles to be passed.
What tariffs are other countries charging on American goods?
American tariffs are usually less than those charged by other countries. According to the World Trade Organization, the average American tariff, which is actually weighted to reflect trading goods, which are actually trading, is 2.7% of the European Union, 3% of China and only 2.2% for India’s 12%.
Other countries also do more than the United States to protect their farmers from high tariffs. The US trade-lo-tariff on the form goods is, for example, 8.4%of the European Union, 12.6%of Japan, 13.1%of China and 4%of India’s 65%. (WTO number Trump’s recent import taxes or recent striking of tariffs do not count among countries that have entered their own free trade agreements, such as the US-Maxico-Kanada Agreement that allows many goods to cross North American borders.)
Nevertheless, the Trump administration has used its calculation to come up with more and more tariffs that other economies apply to the US for example, the White House said on Wednesday that the European Union’s effective tariff is more than the number of WTOs, equal to 39%on the US. It says that 67%of China is the same.
The previous US administration agreed to the tariffs that Trump now says unjust. They were the result of a long conversation between 1986 and 1994 – the so -called Uruguay round – which ended in a trade treaty signed by 123 countries and formed the basis of the global trade system for about four decades.
(Except for the headline, the story has not been edited by NDTV employees and is published by a syndicated feed.)
