Priyanka Tiwari
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Ahead of his meeting with Indian Prime Minister Narendra Modi, US President Donald Trump has announced plans to implement reciprocal tariffs on trade partners. Taking to his social media platform, Truth Social, Trump declared his intent to introduce these tariffs, reinforcing his commitment to reshaping global trade policies.
First Meeting Since Trump's Second Term Began
This marks Trump’s first meeting with PM Modi since he was sworn in for a second term as US President on January 20. Since his return to the White House, Trump has aggressively pursued trade restrictions, imposing tariffs on multiple countries, including China. His latest move further escalates concerns of a global trade war.
On Thursday, Trump confirmed that he would soon sign an executive order enforcing reciprocal tariffs. Under this policy, the US will impose tariffs on imports from a country equivalent to the duties that nation places on American goods.
Trump: "Time to Make America Great Again"
In a post on Truth Social, Trump called it a "big day" for trade policy, writing:
"Today is a big day, reciprocal tariffs. Make America great again."
However, he has not yet clarified which products will be affected by the new tariffs or how he specifically defines "reciprocal" in this context.
Global Economic Impact of Higher Tariffs
Economists warn that a sharp rise in trade tariffs could significantly impact the global economy, potentially slowing economic growth and driving inflation higher. Increased tariffs could lead to higher prices for consumers, particularly in the US, where companies rely on imports for various goods.
Trade Tensions With China, Canada, and Mexico
Trump has justified the move by claiming it will boost domestic manufacturing and create jobs. However, many economists argue that raising tariffs could end up increasing costs for American consumers.
The US has already imposed a 10% additional tariff on Chinese imports and is preparing to target Canada and Mexico, America’s largest trading partners. These new tariffs, if implemented, are expected to take effect in March after a 30-day review period.
Additionally, Trump has already slapped tariffs on steel and aluminum and is reportedly considering new levies on computer chips and pharmaceuticals.
Retaliation from Global Trade Partners
In response, the European Union, Canada, and Mexico are considering retaliatory measures. China has already hit back by increasing tariffs on American energy products, agricultural machinery, and large-engine vehicles. Furthermore, Beijing has launched an investigation into Google, accusing the tech giant of anti-competitive practices.
As trade tensions rise, all eyes will be on Trump's upcoming meeting with Modi, where economic and diplomatic relations between the US and India will be key points of discussion.
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