Donald Trump's focus this week on reciprocal tariffs could upend US trading relationships around the globe, with the president on Thursday morning upping the stakes even more.
"Today is the big one: reciprocal tariffs," Trump wrote on his social media platform, suggesting it could be the biggest move of his presidency so far.
Trump has been touting the plan, which is expected to be rolled out today at around 1 p.m. ET, for days. But he has only offered minimal details of exactly what's to come.
"The world has taken advantage of the United States for many years," he said Wednesday. "We're going to be doing reciprocal tariffs, which is whatever they charge, we charge, very simply."
Depending on how he follows through, it's a move that could upend American allies — from Asia to South America — who have high average tariffs in place.
But other nations could also take note of Trump's recent pledge that "every country will be reciprocal" and point out they currently charge lower average duties on various goods than the US does. Perhaps, these countries could argue, any US tariffs applied to them should actually fall.
These coming reciprocal tariff plans are also now center stage after Trump on Monday evening formalized 25% duties on steel and aluminum, which are set to kick in on March 12.
It's unclear how Trump will measure his reciprocal tariffs or if the president has an interest in lowering duties in the name of reciprocity — but those countries with high duties are sure to be in focus.
"It's going to be developing countries primarily, and I think India being a big one," the Cato Institute's Scott Lincicome said in an interview about who would be most impacted if Trump follows through.
He notes that otherwise US allies like Brazil could also be significantly exposed — in addition to adversaries like China.
But perhaps no country is more caught in the middle than India. Trump and his team have long chafed at duties there, and the tariff imbalance is sure to be unavoidable, with Indian Prime Minister Narendra Modi also set to be in Washington for a visit on Thursday where the country could try and use other issues like oil and gas to head off the impacts.
A Jan. 27 call between Modi and Trump included a conversation about "moving toward a fair bilateral trading relationship," according to a White House summary.
A longtime 'huge irritant' for Trump
Reciprocal tariffs have long been a Trump focus — the concept of "an eye for an eye" was a message he made a part of his stump speech during last year's campaign.
President Donald Trump boards Air Force One at Palm Beach International Airport in Florida on Feb. 9. (ROBERTO SCHMIDT/AFP via Getty Images) ·ROBERTO SCHMIDT via Getty Images
"The notion of non-reciprocal trade is a huge irritant to him," Nazak Nikakhtar, a former assistant Commerce secretary under Trump and current Wiley Law Partner, said in a Yahoo Finance video appearance this week.
Nikakhtar also underlined that Trump has plenty of technical ways to accomplish his objectives, including through the annual reviews by the president's trade representative, which look at trade and tariff imbalances.
What they might actually look like
Meanwhile, a range of questions remain about what Trump is actually set to announce this week with a key immediate question of whether Trump will also be willing to entertain lowering tariffs reciprocally.
The World Bank data underlines that the US currently is about average among industrialized nations when it comes to overall tariff levels. And by one non-agricultural measure, a reciprocal system could actually mean reduced US tariffs on manufactured goods from Europe, Mexico, Canada, or the UK.
All Trump has offered so far is that his reciprocal plans "will be great for everybody."
President Donald Trump and Prime Minister Narendra Modi embrace during a visit in February 2020 in New Delhi. (Pradeep Gaur/Mint via Getty Images) ·Mint via Getty Images
Some have little optimism that Trump — who has long described himself as a "tariff man" — would be open to lowering duties.
"The optimistic take of this potential plan is that the Trump administration is trying to take a more measured approach to rebalancing trade," Capital Economics wrote in a note this week.
But the analysts there quickly added that "given Trump's penchant to act first and negotiate later, it still seems likely that tariffs will push up inflation this year and that the Fed will remain on hold as a result."
Another key question around the reciprocal tariff idea is what experts see as significant implementation challenges.
Professor Henry Gao, an international trade expert, noted this past weekend that implementing a range of country-specific duties at US ports of entry would be a mammoth logistical undertaking.
If Trump moves forward, "expect bureaucratic fireworks," he wrote.
Lincicome agreed it will be a sizable challenge and one that could lead to significant delays at US ports of entry if Trump moves forward — as he has promised — quickly and via executive order.
Getting these in place "would be really, really hard," he said this week, "even with AI."
A previous version of this story, based on an early version of this week's steel and aluminum executive orders, had an incorrect date for when those duties would kick in. They are set to begin on March 12.
Ben Werschkul is Washington correspondent for Yahoo Finance.
