Donald Trump has called tariffs the “most beautiful word” in the dictionary. He’s said they will make Americans “rich” and restructure the economy for the better. Standing in the Rose Garden on Wednesday, with political and business leaders around the world watching closely, Trump bet his faith in tariffs against the hard reality of economics as he launched what is expected to be one of the single largest increases in U.S. trade barriers in a century.
Trump announced he was signing an executive order “instituting reciprocal tariffs on countries throughout the world. Reciprocal—that means they do it to us and we do it to them.” In practice, the White House said that will translate into a new 10 percent tariff on all imported goods, and additional import taxes on 60 other countries. Those additional tariffs vary and were determined by looking at the rules in those countries around U.S. exports, according to the White House.
Trump’s new tariff regime will be on top of various tariffs the U.S. already has in place, and ones Trump had already set in motion targeting imports of cars, steel and aluminum. The reciprocal tariffs would go into effect Thursday, he said.
Speaking to staff, cabinet secretaries and reporters gathered outside the West Wing, Trump gave a rambling and sometimes contradictory explanation of his tariff plan. He said that his administration would calculate what a country charges the U.S. imports through tariffs, “non-monetary barriers and other forms of cheating” and would charge the country half of that in a flat rate. The new tariffs were not a “full reciprocal,” he said. “I would like to have done that.”
Reading from a large chart, he said goods coming from China, for example, would be charged a duty of 34%, goods from the European Union would carry a 20% tariff, Vietnam would have 35% and Taiwan 32%. An eight-page chart handed out to reporters in the Rose Garden listed 60 countries as being charged rates above the baseline of 10%.
Trump had previously announced a separate 25% tariff on all auto imports that is slated to kick in on April 3. He’s imposed 20% tariffs on all imports coming from China and put in place 25% duties on steel and aluminum. He had previously delayed 25% tariffs on goods from Mexico and Canada over his accusation that those countries weren’t doing enough to stop fentanyl from coming to the U.S. That delayed tariff kicks in Wednesday and will be stacked on top of the new sweeping tariffs Trump announced.
Trump has called the day of his announcement “Liberation Day” and billed it as a moment he is remaking the American economy. He promised that income from the new tariffs would reduce taxes and pay down U.S. debt.
American businesses have struggled in recent weeks to plan ahead as Trump’s tariff threats have injected so much uncertainty into their supply chains. Stock indices have dipped. Expectations of inflation have soared. Investors are rattled. Last month, JPMorgan Chase lowered its prediction for GDP growth by 0.3% because of the uncertainty around Trump’s trade policy.
Leading economists say the costs of tariffs are mostly passed on to consumers. On the campaign trail last year, Trump often disputed that. More recently, he has said Americans will have to brace for some temporary economic pain in order to strengthen the U.S. economy over the longer term. But he didn’t mention that on Wednesday.
Trump’s announcement will test his support among Republicans in Congress—all of whom will be hearing about the fallout from their constituents. Iowa Sen. Chuck Grassley expressed concerns about how the new tariffs will impact farmers in his state. As an example of the ripple effect, he pointed to potash, a fertilizer from Canada that is essential for soybean production. “If that goes up by 25% that’s going to hurt the family farm already not making money,” he tells TIME.
—WITH REPORTING BY NIK POPLI
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