In a recent rally in South Carolina, former President Donald Trump announced his intention to reintroduce retaliatory tariffs if he secures a second term. Economists caution that this move could potentially worsen inflation.
What Happened: Trump expressed his plan to implement the “Trump Reciprocal Trade Act” if re-elected, reported The Hill.
The former president stated, “If China or any other country makes us pay a tariff of, let's say 100 [percent], or 200 [percent], or even 300 percent, and they do that, we will make them pay a reciprocal identical tariff of 100 [percent] or 200 [percent] or 300 percent right back.”
Trump’s proposed policy, which he described as “you screw us, and we screw you,” was met with applause from his supporters. He further added that as foreign tariffs increase, taxes on American workers and families would decrease “very substantially.”
Trump had imposed tariffs on several countries, including China, India, and those in the European Union, during his first term. During one point in his presidency, nearly half of Chinese products had up to 25% tariffs slapped on them, affecting goods worth $360 billion.
Earlier this month, Trump hinted at the possibility of imposing a tariff exceeding 60% on all Chinese imports if he returns to the presidency, amidst rising economic and other tensions between the U.S. and China.
Why It Matters: Trump’s potential return to the presidency has been viewed as a business risk by nearly half of Japanese companies, primarily due to the protectionist policies that characterized his previous term from 2017 to 2021.
Previously, in June, Trump had threatened to impose a 100% tariff on Chinese goods if Chinese President Xi Jinping did not shut down China's spy base in Cuba.
Nobel laureate Paul Krugman has also criticized Trump's tariffs, calling them a "bad idea" and "stupid." He thinks this would lead to the end of GATT, or General Agreement on Tariffs and Trade, which seeks to reduce tariffs amongst signatory nations.
Michael Every, a global strategist at Rabobank, thinks Trump’s proposed 10% tariff on all imported goods could have a significant impact on the global economy, warned.
Read Next: Trump Not Sure If He Can Work With Mitch McConnell: ‘He’ll Probably End Up Endorsing Me’
Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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