Trump orders the implementation of tariffs on the European Union as retaliation for VAT

Donald Trump takes a new step in his protectionist escalation with a kind of declaration of trade war against the world. The President of the United States has decided to impose reciprocal tariffs on his foreign trade. This, in principle, implies taxing purchases from his trading partners with rates equivalent to those imposed by them on U.S. exports. However, Trump equates all structural, regulatory, and even fiscal obstacles to tariffs. In particular, he wants to impose tariffs on the European Union in response to the Value Added Tax (VAT), which Washington unfoundedly interprets as a trade barrier. Furthermore, Trump has announced that he will soon approve tariffs on cars, chips, and pharmaceuticals.

The tariffs are not yet set and will not take effect immediately, but Trump will use the threat as a negotiation tool to reduce the soaring trade deficit of the world's largest economy. Trump signed a memorandum on Thursday in the Oval Office of the White House that initiates an administrative process for the Office of the United States Trade Representative (USTR) and the Department of Commerce to begin calculating the new levies. This process overlaps with the one opened on January 20, his first day in office, when he initiated an investigation into unfair trade and monetary practices, focusing on countries with which the United States has a trade deficit.