The American President Donald Trump is considering imposing import tariffs of between 15 and 20 percent on countries with which the United States has not concluded a trade agreement. He will soon send letters to the countries to inform them.
“I think it will be somewhere between 15 and 20 percent,” Trump told reporters from news agency Reuters, among others, on Monday. “Probably one of those two percentages.”
Just a day earlier, the US had reached a trade deal with the European Union, a few days before the August 1 deadline. The blocs agreed on, among other things, a 15 percent US import tariff for European goods. Trump had previously threatened 30 percent.
The president will soon send letters to the approximately two hundred countries with which there is no agreement. In it, he informs them about the expected levies on goods to the US. At the moment, the country levies a general rate of 10 percent for most countries. The US has already announced higher tariffs for some countries.
Import duties mainly affect American consumers
Although Trump sells his import duties as a punishment for foreign countries, it is primarily the Americans themselves who pay for them. The measure means that American companies that purchase foreign products have to pay extra tax to the American government. Companies often incorporate these extra costs into their sales prices, which ultimately means that the levy ends up on the consumer’s plate.
However, the measure can make domestic alternatives attractive. For example, Trump hopes that Americans will buy fewer German cars in the future and instead opt for American models. It should also fill the treasury. Furthermore, he hopes to entice foreign companies to open a factory in the US, because their products are then exempt from levies.
Many economists doubt whether companies will indeed do this en masse. In addition, the companies that move run the risk of still having to pay levies if their suppliers do not move with them.