US Trade Rep. Greer: China has not indicated that it wants to work towards reciprocity
US Trade Representative (USTR) Jamieson Greer said during the Senate Finance Committee hearing on Tuesday that they are currently in talks with about 50 countries about tariffs, per Reuters.
Key takeaways
"Had several conversations with Japanese officials in past week."
"US President Donald Trump's administration wants more market access for agriculture
"Trump administration is open to ideas from other countries to achieve reciprocal trade."
"China made significant changes early in phase 1 trade deal, but did not comply in large part."
"Will work with India to address intellectual property, structural barriers to trade."
"Higher reciprocal tariffs will go into effect tomorrow."
"Many countries have said they won't retaliate, some have already lowered tariffs."
"China has not indicated that it wants to work towards reciprocity."
"Seeing distinct difference between China and other countries that are seeking to negotiate."
Market reaction
The market mood remains upbeat following these comments. At the time of press, the S&P 500 Index was up 3.8% on the day.
Tariffs FAQs
Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.
Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.
There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.
During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.
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