There are moves that Trump is taking to put “fair and reciprocal” tariffs on trade partners and friends.

The president ordered “country by country” reviews of trade relations with other countries in order to lower the United States’ trade imbalance. The new taxes won’t start right away, though.

Thursday, President Donald Trump signed a memo asking for “fair and reciprocal” trade tariffs on all of the U.S.’s major trading partners, even those that have been allies for a long time.

The memo asks Howard Lutnick, Trump’s choice for commerce secretary, and Jamieson Greer, his global trade agent, to write a report for each country within 180 days stating whether “remedies” are needed to ensure trade between the two sides. Russell Vought, Trump’s Office of Management and Budget leader, will propose a reciprocal tariff, charging the same amount as other countries, stating that past higher tariffs are over. ” In addition to the reciprocal tariffs, Trump said there would be extra taxes on cars, electronics, and medicines that come from other countries.

These taxes would happen later, though.
The order gave a less clear timetable for the new measures than expected, which made the markets react positively. The 10-year Treasury note showed that the cost of getting money went down while the Dow Jones Industrial Average went up more than 350 points. In a call with reporters before the memo was signed, White House senior counselor for trade and manufacturing Peter Navarro said that the world’s biggest exporters had made a “pernicious, trillion-dollar” trade gap with the U.S. He said that the value-added tax (VAT) used by the European Union hurts U.S. exports, but some pro-free-market critics have said that isn’t true.

MRI machines, drugs, and vaccines would probably be the ones most affected by new trade tariffs with Europe because they are brought in so often.

There are experts who say that putting in place new trade taxes country by country would be a huge job.

“Declaring reciprocal tariffs will not be easy,” Josh Teitelbaum told CNBC. He is a senior counsel at Akin and helped make the Trans-Pacific Partnership trade deal. “It would be very hard to figure out where tariff rates are different for different products in different countries.” A lot more study needs to be done before something that big can happen.

Trump has announced a number of tariffs, but so far he has only put one set into effect: an extra 10% tax on Chinese imports on top of the duties that were already in place. This week, Trump announced 25% duties on steel and aluminum imports. These duties would not go into effect until the first week of March. Trump also delayed 25% duties on imports from Canada and Mexico.

Some investors and business groups are against Trump’s tariffs because they think they will make prices go up for U.S. consumers. However, economists are still not sure what the long-term effects of tariffs will be on the U.S. economy.

Not long ago, leaders at Ford said that tariffs on Canada and Mexico would have a huge impact on the company and that they “would burrow a hole in the U.S. industry that we have never seen.”

The Brookings Institution said in a study on February 3 that tariffs could cause up to 177,000 jobs to be lost in the U.S.

Jamie Dimon, CEO of JP Morgan, said that the tariffs would be worth it if they improved national security or led to better deals for the U.S.

“Let it be. If it boosts prices a little but protects the country, then so be it.” He said this at the World Economic Forum last month in Davos, Switzerland: “I mean, get over it.”

This week, Federal Reserve Chair Jerome Powell didn’t talk about tariffs when he spoke on Capitol Hill. However, many economists say that putting tariffs in place could eventually have an effect on interest rates if they slow down the economy or make prices go up.

“It’s not the Fed’s job to make or comment on tariff policy,” he said. “That’s for elected people, and it’s not for us to comment.”