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President Donald Trump on Thursday has instructed his government to prepare to levy significant import taxes on any country that imposes its own taxes on American imports, stopping short of immediately imposing the massive tax hikes on American importers but starting a process that experts say could portend a global trade war of the sort not seen in the modern era.
He and his allies have suggested that higher tariffs in foreign imports would create a level playing field between the U.S. manufacturing and foreign competition, but in reality the tariffs would be a tax increase on Americans paid in the form of higher prices.
He told reporters the tariffs would not be implemented immediately and said the memorandum he signed has tasked his administration with studying trade imbalances and reporting on which countries’ imports should be subject to which tax rates.
Because tariffs are taxes added to prices paid by consumers, the effect of any tariffs his administration imposes could be to supercharge rates of inflation that he has promised to bring down.
Trump frequently describes tariffs as if they are paid by foreign countries even though they are taxes paid by American consumers.
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