The recent Narendra Modi-Donald Trump meeting in Washington was overshadowed by the US President, who, just hours before, upended global trading arrangements in favour of the US, by establishing the principle of reciprocity as the foundation of trade relationships.
Based on the America First Trade Policy Memorandum, which was signed by Trump on his first day back in office on 20 January, the US is preparing a “fair and reciprocal plan” to counter non-reciprocal trading arrangements by determining the equivalent of a reciprocal tariff with respect to each foreign trading partner.
It does not end there.
Unfair, discriminatory, or extraterritorial taxes imposed on US businesses, workers, and consumers, costs from non-tariff barriers or measures, and unfair or harmful acts, policies, or practices — including subsidies and burdensome regulatory requirements on American businesses operating in other countries — are all targeted.
Further, practices that cause exchange rates to deviate from their market value, wage suppression, and other mercantilist policies have been singled out.
Although implementation is likely to take longer, an initial assessment of the cost to America of such “unfair measures” imposed by other countries is to be assessed in six months.