What happened
President Donald Trump Wednesday unveiled a baseline 10% tariff on all imported goods and steeper “reciprocal” import taxes for specific countries, including 20% for the European Union, an extra 34% for China, 24% for Japan, 46% for Vietnam and 50% for Lesotho.
Hours after his announcement, the Senate voted 51-48 to quash Trump’s earlier 25% tariffs on Canadian goods, with four Republicans joining the Democrats. Trump’s 25% tariffs on imported cars and auto parts went into effect this morning.
Who said what
Trump “meted out the massive tariffs he has dreamed of for decades” with the “panache of a gameshow host, promising that they would restore fairness to U.S. trading relationships” and revive U.S. manufacturing, Politico said. His Rose Garden speech took place “shortly after the stock markets closed,” avoiding the “visual of cratering markets that could have flashed across television screens as Trump spoke.” Asian markets and U.S. stock futures dropped sharply following his announcement.
The tariffs amount to a “historic tax hike that could push the global order to a breaking point” while kickstarting a “painful transition” to higher U.S. prices on “middle-class essentials such as housing, autos and clothing” and “disrupting the alliances built to ensure peace and economic stability,” The Associated Press said. The tariff rates are “shockingly high compared to what people were expecting,” said Peter Tchir at Academy Securities to The New York Times, and the formula to determine them is “inexplicable in many ways.”
The Senate vote to kill Trump’s Canada tariffs was “largely symbolic,” given his veto and opposition in the GOP-led House, The Wall Street Journal said. But it still “marked a significant rebuke” of Trump’s “expansive effort to overhaul U.S. trade policy with friends and foes alike.”
What next?
The tariffs are a “breathtaking political gamble” for a president elected on a “wave of public anger over inflation,” The Washington Post said. The “early reaction from mainstream economists and business groups was grim, while industries that will enjoy new protection against foreign competition applauded.”