US Executive Order to Rectify Trade Practices (‘Reciprocal Tariffs‘)

As the Trump Administration seeks to rectify goods trade deficits of the US, US President Donald Trump signed the Executive Order ‘Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent Annual United States Goods Trade Deficits’ on April 2nd. The Executive Order is partly based on the ‘International Emergency Economic Powers Act (IEEPA)’ from 1977. IEEPA authorizes the president of the US to regulate international commerce in light of a national emergency and in response to extraordinary threats to the United States. The signing of the Executive Order had been advertised as “Liberation Day”. During the presentation President Trump presented ‘reciprocal tariffs’ for 185 countries and territories. The Executive Order lists 57 countries and territories which will be submitted to tariffs on imports into the US ranging from 11%-50% in addition to already existing tariffs (“additional ad valorem duty on all imports”). This provision will be valid from April 9th. All other countries and territories have been submitted to a baseline additional tariff of 10% since April 5th. Only a few countries and goods (i.e. steel, pharmaceuticals, semiconductors) are exempted from these import tariffs.