Trump Launches Plan For 'Reciprocal Tariffs:' S&P 500 Nears Record Highs, Dollar Tumbles

President Donald Trump announced Thursday a roadmap for enacting reciprocal tariffs on countries that impose duties on U.S. goods.

Despite the announcement, investors remained unshaken, as the move had been widely expected following Trump’s hints the previous week. Additionally, with the plan still in a study phase until April 1, it creates a window for potential negotiations with trading partners.

The S&P 500 – tracked by the SPDR S&P 500 ETF SPY – rallied by 1% by 3:20 p.m. ET, trading at a less than 0.1 percentage points below record highs.

The Nasdaq 100 – as broadly followed by the Invesco QQQ Trust QQQ – soared 1.3%. The dollar tumbled 0.8%, recording its worst day since Jan. 20, while gold traded at $2,930 per ounce, heading towards the highest daily close ever.

Matching Foreign Tariffs: ‘A Beautiful, Simple System’

Trump's proposal would mirror tariffs imposed by other nations on U.S. exports.

“Whatever they charge us, we’re charging them. So it works out very well. It’s a beautiful, simple system,” Trump said.

“Reciprocal makes tariffs really fair. There won’t be any exemptions.”

Trump specifically mentioned India as an example of a country where high tariffs make it difficult for U.S. companies to compete.

“I remember when Harley-Davidson couldn’t sell their motorbikes into India because the tariff was so high,” Trump said.

Trump indicated that companies could avoid tariffs altogether by manufacturing in the U.S.

“They can build a factory here, a plant or whatever it might be. That includes medical, cars, chips, semiconductors—everything. If you build here, you have no tariffs whatsoever. And I think that’s what’s going to happen. Our country is going to be flooded with jobs.”

Impact On Prices, Government Revenue

When asked whether prices could rise due to new tariffs, Trump indicated that short-term price increases could occur but argued that long-term effects would be positive for American workers.

“Prices could go up somewhat short term, but prices will also go down. It's going to mean tremendous amounts of jobs,” he said.

When asked how much revenue the tariffs could generate annually, Trump predicted a “staggering” financial boost for the U.S. government.

“This is going to be the thing that makes our country really prosperous again. And this is going to be what pays down the $36 trillion in debt,” Trump said.

Tough Trade Talks Ahead With EU, Canada

Trump also singled out the European Union, criticizing its 20% value-added taxes an unfair trade barrier.

“The EU has been very nasty. They haven't treated us properly,” he said, adding that Brussels imposes additional fees that he said disadvantage U.S. businesses.

Trump said that if Canada were to become the 51st state, Canadians would benefit from lower taxes and improved security.

“I think Canada is going to be a very serious contender to be our 51st state,” Trump said.

Global Trade And Geopolitical Moves

Beyond trade, Trump stated Thursday that Ukraine should have a seat at the table in any peace negotiations with Russia.

“I do believe Putin really wants peace,” he said.

Regarding Russia’s possible return to the G8, Trump reiterated his stance that excluding Moscow was a mistake.

“They should be sitting at the [G8] table. I think Putin would love to be back,” he said.

Trump also warned BRICS nations against attempting to undermine the U.S. dollar.

“If they want to play games with the dollar, then they’re going to be hit with a 100% tariff,” he said.

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