U.S. to push for 'reciprocal tax' on
trade partners: Trump
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[February 13, 2018]
By David Shepardson
WASHINGTON (Reuters) - U.S. President
Donald Trump said on Monday he would push for a "reciprocal tax" against
countries, including U.S. 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, Republican Trump 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,"
Trump told reporters at a White House event to announce a proposed
infrastructure plan.
The United States loses "vast amounts of money with China and Japan and
South Korea and so many other countries ... It's a little tough for them
because they've gotten away with murder for 25 years. But we're going to
be changing policy," he said.
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Trump said his administration will impose a "reciprocal tax" to charge
other countries - "some of them are so-called allies but they're not
allies on trade."
He did not specify how such a tax would be structured, or whether he
meant that U.S. tariff rates should be raised to equal to those charged
by other major trading partners. Administration officials were not
immediately able to elaborate on the president's comments.
Trump cited motorcycle maker Harley-Davidson <HOG.N> as an example of
the problem of unfair trade. Harley is building a factory in Thailand,
partly because its U.S.-built bikes face a 60 percent tariff there.
The United States has pledged to the World Trade Organization a
relatively low, 3.5 percent applied tariff rate, compared to 9.9 percent
for China and 5.2 percent for the European Union. For some products, the
gap is much wider, such as in passenger vehicles, where the United
States charges 2.5 percent tariffs, versus 25 percent in China and 10
percent in the EU.
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President Donald Trump holds a meeting on his infrastructure
initiative at the White House in Washington, U.S., February 12,
2018. REUTERS/Kevin Lamarque
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It was also unclear whether 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 percent 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."
Trump asked Commerce Secretary Wilbur Ross if he agreed with the
idea of a reciprocal tax during the infrastructure event.
Ross said, "sure," and proceeded to say that the United States 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," Ross added.
(Reporting by David Shepardson, David Lawder, Makini Brice; editing
by Grant McCool and Tom Brown)
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