US President Donald Trump signed a presidential memorandum Thursday to devise a comprehensive plan to customize "reciprocal" tariffs based on trading partners' duties, non-tariff barriers, exchange rate policies and other elements.
The memorandum on the "fair" and "reciprocal" plan tasks Commerce Secretary Howard Lutnick and the US Trade Representative (USTR) to submit a report with proposed remedies on a country-by-country basis as Trump is pushing to roll out new tariffs on US imports to match what other trading partners impose on US exports.
Speaking to the press, Trump said he does not expect any tariff exemptions or waivers, stressing the tariff plan "applies to everybody across the board." His administration's study on the new tariffs will be complete by April 1, according to Lutnick.
The announcement has been keenly watched by policymakers in Seoul amid concerns that Asia's fourth largest economy could be put into the Trump administration's crosshairs given that South Korea's trade surplus with the United States reached $55.7 billion last year.
"I've decided for purposes of fairness that I will charge a reciprocal tariff," Trump was quoted by the Associated Press as telling reporters in the Oval Office. "It's fair to all. No other country can complain."
The memorandum said that for many years, the US has been treated "unfairly" by trading partners, "both friend and foe" alike.
"This lack of reciprocity is one source of our country's large and persistent annual trade deficit in goods. Closed markets abroad reduce US exports, and open markets at home result in significant imports," it said.
In a telephonic briefing earlier, a White House official reiterated Trump's view that the US has been being "taken advantage of" by its trading partners.
"It doesn't matter whether it's strategic competitors like Communist China, or allies like the European Union or Japan or Korea," the official said. "Every one of those countries is taking advantage of us in different ways, and the president characterizes this as a lack of reciprocal trade."
Asked if he is concerned that countries hit by new US tariffs could shift their trade to China, Trump said he's not.
"I'm just doing what's fair. This is a very fair thing," he told reporters. "This should have been done a long time ago."
Under the new plan, the Trump administration plans to customize reciprocal tariffs based on individual trading partners' comprehensive profile.
The customization will take into account countries' tariffs on US products; their "unfair, discriminatory or extraterritorial" taxes, including a value-added tax; and costs to US businesses, workers and consumers arising from tariff- and non-tariff barriers or other practices, including subsidies and burdensome regulatory requirements, the White House official said in the press briefing.
Another element to be factored in is countries' exchange rate-related policies and practices, the official said, pointing to cases in which policies cause rates to deviate from market value to the detriment of Americans and push US trade deficits up.
In November, the US government put South Korea back on its list of countries to monitor for their foreign exchange policies, a year after its exclusion from the list -- a point the Trump administration could consider in its review process for reciprocal tariffs.
The commerce secretary and the USTR are tasked to submit to the president a report on country-specific trade remedies.
"Our studies (on reciprocal tariffs) should be all complete by April 1. ... We will hand it to the president, and he will make his decisions," Lutnick said.
"But remember, if they drop their tariffs, prices for Americans are coming down. Our production is going up, and our costs are going down. Remember it's a two-way street. That's why it's called reciprocal."
The White House official in the briefing said that the US government will first examine those countries that have the highest deficits with the US or "the most egregious issues."
"I think this will be done in what I have called in the past -- in Trump time, which is to say very rapidly," the official said.
"This should be a matter of weeks (or) a few months, but not much longer than that. We move quickly here, and there's a lot of existing data, both in the commerce (department) and the USTR, which is right at their fingertips to help pull all that together."
Asked if countries can negotiate out of reciprocal tariffs, the official said that "the president is more than happy to lower tariffs if those countries want to lower tariffs."
Meanwhile, Trump reiterated his push to boost domestic manufacturing, claiming that Taiwan took US chip businesses away.
"Everything is made in Taiwan, practically almost all of it (and) a little bit in South Korea," he said. "It was taken from us, and we want that business back." (Yonhap)
