US to push for ‘reciprocal tax’ on trade partners: Trump

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But officials do no specify how such a tax would be structured

WASHINGTON: US President Donald Trump said on Monday he would push for a "reciprocal tax" against countries, including US allies, that levy tariffs on American products, but officials did not provide details on how such a tax would be structured or what goods it would apply to.

During his populist 2016 presidential campaign, the Republican railed at countries that had trade surpluses "taking advantage of the United States" and he revisited the theme on Monday.

"We cannot continue to let people come into our country and rob us blind and charge us tremendous tariffs and taxes and we charge them nothing," Mr Trump told reporters at a White House event to announce a proposed infrastructure plan.

The US loses "vast amounts of money with China and Japan and South Korea and so many other countries... It is a little tough for them because they have got away with murder for 25 years. But we are going to be changing policy", he said.

Mr Trump said his administration will impose a "reciprocal tax" to charge other countries - "some of them are so-called allies but they are not allies on trade".

He did not specify how such a tax would be structured, or whether he meant that US tariff rates should be raised to equal to those charged by major trading partners.

Administration officials were not able to elaborate on Mr Trump's comments.

Mr Trump cited motorcycle-maker Harley-Davidson as an example of the problem of unfair trade.

Harley is building a factory in Thailand, partly because its US-built motorbikes face a 60 per cent tariff there.

The US has pledged to the World Trade Organisation a relatively low, 3.5 per cent applied tariff rate, compared to 9.9 per cent for China and 5.2 per cent for the European Union.


For some products, the gap is much wider, such as in passenger vehicles, where the US charges a 2.5 per cent tariff, versus 25 per cent in China and 10 per cent in the EU.

It was also unclear whether Mr Trump was reviving the idea of a border adjustment tax, an idea rejected by congressional Republicans in last year's tax reform effort.

Retailers and some import-dependent industries strongly opposed the plan for a 20 per cent tax on imports aimed at offsetting the value-added tax refunds that some countries grant to their exporters.

The National Retail Federation at the time called it a "bad tax" that would "drive up the prices of countless products Americans use every day".

Mr Trump asked Commerce Secretary Wilbur Ross if he agreed with the idea of a reciprocal tax during the infrastructure event.

Mr Ross said "sure" and proceeded to say that the US for too long had offered trade concessions to other countries that were no longer needed.

"Well, we gave away so much unilaterally that we really have to claw it back," he added. - REUTERS