Trump issues reciprocal tariff order
President Trump on Thursday signed a presidential memorandum laying out his plan to apply tariffs on imports that equal any tariffs or other levies put on those products from the U.S. by other countries.
In a post on his Truth Social social media network, President Trump said that the U.S. will charge a reciprocal tariff. This means that whatever other countries charge the U.S for a tariff, the U.S. will charge those countries the identical amount on the identical product.
According to the Truth Social post, this policy will also cover value-added taxes (VATs), which Trump said are "far more punitive" than tariffs. In addition, the policy will prohibit sending merchandise through other countries into the U.S. avoid tariffs and also consider non-monetary tariffs and trade barriers put in place against U.S. products. Tariffs will not be assessed on any products built or manufactured in the U.S. by a foreign company.
Trump said Howard Lutnick, who is nominated to serve as secretary of commerce in his administration, will take charge of research on what specific reciprocal tariffs the U.S. should issue. Studies are expected to be completed by April 1, 2025, at which time reciprocal tariffs could begin.
NRF Response
In a statement, David French, the National Retail Federation executive VP of government relations, said that while the group support the president’s efforts to reduce trade barriers and imbalances, "this scale of undertaking is massive and will be extremely disruptive to our supply chains."
"It will likely result in higher prices for hardworking American families and will erode household spending power," French said. "We encourage the president to seek coordination and collaboration with our trading partners and bring stability to our supply chains and family budgets."
French added that the University of Michigan monthly consumer sentiment index continues to decline, "suggesting consumers are alarmed about trade war uncertainty.”
Tariff plans go through changes
U.S. tariffs have undergone a number of twists and turns since President Trump first signed an executive order placing a 25% tariff on nearly all goods coming into the U.S. from Canada, effective Feb. 4, as well as a 10% tariff on imports from China.
While the order also called for a 25% tariff on all Mexican goods, it is being delayed for one month to allow for negotiations. On Feb. 3, the Trump Administration also paused the implementation of a planned 25% tariff on imports from Canada for 30 days as negotiations on a border deal take place.
In total, the U.S. does about $1.6 trillion in annual business with the three countries, which account for more than a third of the goods and services that are imported to or bought from the United States and are this country's largest trading partners.
In other tariff-related developments, the Trump Administration briefly excluded shipments from China from the de minimis exception, which exempts imported shipments with an aggregate value of less than $800 from having to pay tariffs but then reverted to the same eligibility requirements for Chinese goods that had been in place since September 2024.
CNBC previously reported that low-priced shopping apps Shein and Temu paid no import duties in 2022 due to de minimis exemption claims, and a 2023 report from the House Select Committee on the Chinese Communist Party found that the two companies likely generate almost half of all de minimis shipments to the U.S. from China.
[READ MORE: Trump restores tariff loophole used by used by low-cost shopping apps]
