MxM News

Quick Hit:

President Donald Trump on Thursday signed a memorandum directing his administration to implement a “fair and reciprocal” trade policy, ensuring that foreign nations imposing high tariffs on American goods will face identical treatment. In a statement on Truth Social, Trump declared that the days of the U.S. being economically exploited are over, vowing to retaliate against trade policies that unfairly disadvantage American businesses.

Key Details:

• Trump wrote on Truth Social, “For purposes of fairness, I will charge a RECIPROCAL Tariff meaning, whatever Countries charge the United States of America, we will charge them—No more, no less!”

• The policy will consider Value-Added Tax (VAT) systems—widely used in Europe—as trade barriers equivalent to tariffs, with Trump arguing they are “far more punitive” and used to harm American exports.

• The administration will crack down on trade loopholes, including countries shipping goods through third-party nations to evade tariffs. “Sending merchandise, product, or anything by any other name through another Country, for purposes of unfairly harming America, will not be accepted,” Trump warned.

Diving Deeper:

Trump’s reciprocal tariff plan is designed to end decades of one-sided trade deals that he says have crippled American industries and workers. By enforcing equal tariffs on foreign nations, Trump is making it clear: If a country charges the U.S. high tariffs, they will face the same in return.

Trump specifically called out countries that manipulate Value-Added Tax (VAT) systems, arguing that these taxes function as hidden trade barriers designed to punish U.S. exports while protecting foreign industries. He declared, “For purposes of this United States Policy, we will consider Countries that use the VAT System, which is far more punitive than a Tariff, to be similar to that of a Tariff.”

Beyond traditional tariffs, Trump’s administration is also cracking down on non-monetary trade barriers, such as regulations designed to block American businesses from competing fairly overseas. He emphasized, “Provisions will be made for Nonmonetary Tariffs and Trade Barriers that some Countries charge in order to keep our product out of their domain or, if they do not even let U.S. businesses operate.”

Additionally, Trump warned against countries attempting to game the system by shipping goods through third-party nations to avoid tariffs. “Sending merchandise, product, or anything by any other name through another Country, for purposes of unfairly harming America, will not be accepted,” he stated.

Critics, including some business groups and investors, argue that tariffs could increase costs for U.S. consumers, but Trump’s supporters say securing fair trade is worth any short-term disruption. JPMorgan CEO Jamie Dimon defended the approach, stating, “If it’s a little inflationary but it’s good for national security, so be it. I mean, get over it.”

Meanwhile, Federal Reserve Chair Jerome Powell sidestepped questions about the policy but acknowledged that trade barriers could influence economic conditions, saying, “It’s not the Fed’s job to make or comment on tariff policy. That’s for elected people.”