U.S. President Donald Trump on Thursday asked his staff to come up with a plan to impose new tariffs on trading partners around the world that have economic practices he and his staff see as putting American trade at an “unfair” disadvantage.
The president ordered his economics team to study all of the country’s trading partners and come up with a plan to counteract trade barriers that slow down the flow of U.S. products to foreign markets. Those barriers include other countries’ existing tariffs on American imports, but trade regulations, sales taxes and exchange rates could also count.
The administration is planning to impose more tariffs — called reciprocal tariffs — on foreign countries to match the rates they charge on U.S. imports.
“We had a very unfair system to us … Everybody took advantage of the United States,” Trump told reporters in the Oval Office.
“Whatever countries charge the United States of America, we will charge them. No more, no less.”
The move indicates Trump is looking to overhaul the nation’s global trading relationships and encourage more spending on American industry, with tariffs as leverage — not just against enemies, but longtime allies like Canada, India and the European Union.
Reciprocal tariffs refer to tariffs where two countries impose similar taxes on each other’s goods. (If your neighbour charged you $5 to borrow a carton of milk, for example, you’d respond by charging them at the same rate when they wanted a carton from you.)
Reciprocal tariffs would come on top of the tariffs Trump has already threatened to impose on other nations, including Canada.
President takes issue with Canada
Trump on Thursday singled out Canada’s controversial digital sales tax, which imposes a three per cent tax on companies that provide digital services — like online advertising or shopping — and get more than $20 million of revenue from Canadian sources. (Think Google, Amazon or Apple.)
The United States has argued the tax discriminates against American companies.
“Only America should be allowed to tax American firms,” a fact sheet from the White House said.
The president also sees Canada’s general sales tax as a tariff, two senior Canadian government sources told Radio-Canada. He raised the issue during one of his calls with Prime Minister Justin Trudeau on Feb. 3. The sources say that Trudeau responded by noting there are several American states, including Florida, with sales taxes of their own.
Trump’s issue is that Canada has a federal sales tax and the U.S. does not, a third source said.
The National breaks down why the U.S. president is so fixated on Canada. Plus, About That host Andrew Chang explains why Trump wants tariffs on steel and aluminum — again.
The president also criticized Canada’s NATO contributions on Thursday and said he’d argued with Trudeau about the decision to remove Russia from the alliance after its invasion of Ukraine.
“Canada’s been very bad for us on trade, but now Canada’s going to have to start paying up,” he said Thursday.
Trump was expected to introduce reciprocal tariffs at the event, but stopped well short of that mark. His memo gives staff 180 days — about six months — to study the levies trading partners have imposed on U.S. goods and come up with a response.
The White House official told reporters the administration would examine what it called the most “egregious” issues first when considering reciprocal tariffs, including countries with the biggest trade surpluses and highest tariff rates.
The tariffs would avoid a “one-size-fits-all” approach for more customized levies, he said, though he did not rule out a flat global tariff.
Canada had a trade surplus of $94.4 billion with the U.S. in 2023. Trudeau has a plan to impose retaliatory tariffs on $155 billion worth of American goods coming into Canada, should Trump’s initial tariff promise come to fruition.
The president threatened 25 per cent tariffs on almost all imports from Canada and Mexico earlier this month. The nations avoided a trade war when their leaders made last-minute deals to postpone the tariffs by 30 days. The agreement involved boosting security at shared borders with the U.S., among other measures.
Trump nevertheless hit Canada’s steel and aluminum industry with the announcement of 25 per cent tariffs on Monday, well before the end of the reprieve. Trudeau said those levies, set to come into effect on March 12, were “unjustified” and “unacceptable.”
Trump said on Monday he was also looking at separate tariffs on cars, semiconductors and pharmaceuticals. On Thursday, he said he was also looking at the extra taxes for cars.
Trump, who campaigned on a promise to bring down prices for Americans, said U.S. consumers could see costs rise in the short term as a result of the moves. The president has long seen tariffs as a way to fuel the domestic economy by making foreign products less attractive.
“Tariffs are great,” he said Thursday.
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