What are Donald Trump's reciprocal tariffs and which countries will get hit the most because of this?
The term “reciprocal” refers to measures taken to ensure fairness in trade. Trump argues that many trading partners of the US are at a competitive advantage.
US President Donald Trump signed a measure on February 13, 2025, proposing reciprocal tariffs which could completely alter the trading relationship of the US with the rest of the world.
What are reciprocal tariffs?
The term “reciprocal” refers to measures taken to ensure fairness in trade. Trump argues that many trading partners of the US are at a competitive advantage as they have higher tariffs (taxes on imported goods) compared to the US, thus putting American manufacturing at a disadvantage.
This is not something new. During the first Trump administration, the then-Commerce Secretary Wilbur Ross proposed a hike in tariffs to match the partner countries’ own import taxes and lower the rates only when those countries did.
Now Howard Lutnick, Trump’s nominee to head the Commerce Department, said the proposals could be ready by the beginning of April.
However, this also comes at a risk. If exports from a number of countries to the US get taxed more heavily, there is also a risk of higher inflation in the US, which is the world’s biggest economy, and slower economic activity in the other countries.
How will the tariffs be shaped?
Trump's reciprocal tariffs would be customised and different for each US trading partner, according to a Bloomberg report which cited a copy of a memo distributed by the White House.
The tariffs are also supposed to offset what are seen as unfair regulations, value-added taxes (VATs), exchange rates, and lax intellectual property protections.
The tariffs could also be imposed in a number of ways such as for specific products, to entire industries, or as an average tariff on all the goods arriving from the specific country.
The US could potentially even lower tariffs in some cases to reciprocate positively, but this is something which remains to be seen.
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Which countries would Trump's reciprocal tariffs hit the most?
Emerging market such as India, Argentina and a large part of Africa and Southeast Asia would be affected adversely the most, according to the report.
Though these nations will be hit the hardest, many of the remaining world will be affected to some degree as well.
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