What are they? Reciprocal tariffs will be based on a host of charges, including tariffs and taxes. These include Digital Services Tax and sales taxes, such as Europe’s 20% VAT and Canada’s 5%-15% Goods and Services Tax and Harmonized Sales Tax, which US Commerce Secretary Howard Lutnick called a “national tariff on our products” on Wednesday.
Which countries would be most affected? India, Argentina, South Korea, and Brazil had the highest tariff regimes as of 2023. India recently cut levies on many US imports, including motorcycles, but still has tariffs on imported cars of up to 110%, leaving small exporters demanding further reductions from Delhi. Argentinian President Javier Milei recently praised Trump’s plan for reciprocal tariffs and said he wants to pursue a reciprocal trade pact, even if it means leaving the Mercosur trade pact with neighboring South American countries.
Will Trump reverse course? It’s possible but unlikely. Trump has long been a believer in tariffs. In his address to Congress on Tuesday evening, he said “Tariffs are not just about protecting American jobs. They’re about protecting the soul of our country.”
