WASHINGTON (Reuters) -Donald Trump’s trade advisers were finalizing plans on Wednesday for the reciprocal tariffs the U.S. president has vowed to impose on every country that charges duties on U.S. imports, ratcheting up fears of a widening global trade war.
Separately, trade ministers of the 27-country European Union were due to meet later by videoconference to determine their response after European Commission President Ursula von der Leyen said tariff moves against the bloc “will not go unanswered”.
Trump stunned markets with his decision on Monday to impose tariffs on all steel and aluminium imports beginning on March 12. The plans drew condemnation from Mexico, Canada and the European Union, while Japan and Australia said they were seeking exemptions from the duties.
The news sent industries reliant on steel and aluminum imports scrambling to offset an expected jump in costs.
Last week, Trump imposed an additional 10% tariff on Chinese goods, effective February 4, with Chinese countermeasures taking effect this week.
He delayed a 25% tariff on goods from Mexico and Canada for a month until March 4 to allow negotiations over steps to secure U.S. borders and halt the flow of fentanyl.
Some U.S. workers welcomed Monday’s metal tariffs, but many manufacturing-heavy firms expressed deep concern over the next steps, warning the tariff hike would reverberate across supply chains, affecting all businesses that rely on the materials.
Executives from companies including supermarket chain Ahold Delhaize and Siemens Energy warned tariffs would lead to higher prices as they seek to pass on the extra costs of imports.
Europe’s steelmakers are also worried that U.S. tariffs will lead to a flood of cheap steel coming into Europe. French steelmaker Aperam urged Brussels to intervene to curb imports if that happened, while Austria’s speciality steelmaker voestalpine called on the EU to take immediate countermeasures.
Australia’s industry minister meanwhile said the nation’s plan to boost “green” aluminium exports would not be derailed by the threat of U.S. tariffs.
“The world has a high demand for our aluminium; we need it as part of the transition to net zero,” Ed Husic told reporters at the National Press Club in Canberra. “The question is for our American friends do you really want to pay more for that product that you’ve got a big demand for?”
MONUMENTAL UNDERTAKING
White House officials have been tight-lipped about the structure or timing the next tariffs, with one source saying the announcement might come later in the week.
Trump said on Monday he would announce reciprocal tariffs over the next two days on all countries that impose duties on U.S. goods, and said he was also looking at separate tariffs on cars, semiconductors and pharmaceuticals.
Trade experts say structuring the reciprocal tariffs that Trump wants poses big challenges for his team, which may explain why the latest duties were not announced on Tuesday.
William Reinsch, senior fellow at the Center for Strategic and International Studies, said Trump officials could opt for a more easily implemented flat 10% or 20% tariff rate, or a messier approach that would require separate tariff schedules matching U.S. tariffs to each other country’s rates.
One source tracking work on the tariffs said details were still being worked out late Tuesday.
Damon Pike, a trade specialist and principal with the U.S. division of accounting firm BDO International, said the reciprocal tariffs that Trump envisioned would result in a monumental undertaking, given that each of the 186 members of the World Customs Organization had different duty rates.
“At the international level, there’s something like 5,000 different descriptions at the 6-digit (product subheading) level, so 5,000 times 186 nations. It’s almost an artificial intelligence project,” he said.
Trump also could use the same International Emergency Economic Powers Act used to justify the tariffs imposed on China and pending for Canada and Mexico.
“Absent IEEPA, there would need to be some kind of agency action first before any trade remedy tariffs can be imposed … but everything seems to be on the fast track,” Pike said, adding that normally tariffs would be done by Congress.
Reinsch said imposing reciprocal tariff also ceded control of the U.S. tariff schedule to other countries, following whichever tariff rate they set, and could lead to counterproductive results.
“For example, if Colombia has a high tariff on coffee in order to protect its industry, we would put a high tariff on Colombian coffee to match theirs, even though we don’t grow coffee. The only people hurt would be U.S. consumers,” he said.
(Reporting by Andrea Shalal and David Lawder in Washington; Editing by Lincoln Feast, Mark John and Sharon Singleton)
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