President Trump Declares New Trade War: Tariffs Will Cause Shockwaves

In the latest development on the international trade front, President Donald Trump has announced the initiation of a new "trade war" by implementing a series of breakthrough tariffs, targeting most of the United States' trading partners. The new tariffs are expected to take effect next week, according to his remarks at a press conference at the White House with Japanese Prime Minister Shigeru Ishiba. Strategy of "Revenge" Instead of Fixed Tax In his speech, Trump stated that he will announce the details of the measures early next week, possibly on Monday or Tuesday. "We will be treated fairly, no more, no less," he affirmed. Although he did not disclose the specific list of targeted countries or specific tax rates, this statement has created waves of concern among the trading partners of the United States. Unlike the previous plan to apply a fixed tax rate of 10-20% for all imported goods, Trump now prioritizes a tit-for-tat model. Accordingly, tax measures will be designed to target the 'weak spots' of countries that, according to him, have harmed the US economy. 'I think that is the only fair way - they charge us, we also charge them back,' he explained. Target Industries One of the top priorities of this strategy is the automotive industry. Trump emphasized that the automotive industry is "always in the sights" and may be subject to new tariffs to balance trade deficits, especially with Europe. He criticized the high value-added tax (VAT) of the European Union - sometimes exceeding 15% - making it difficult for American products to compete in the international market. In addition to the automotive industry, essential industries such as steel, petroleum, and pharmaceuticals are also included in the list of 'sanh đòn' sectors. Trump believes that these industries play a crucial role in maintaining the United States' economic dominance in the international arena. Recent Developments in the Trade War In recent days, Trump has proposed a 25% tariff on imported goods from Canada and Mexico - two strategic neighboring countries of the United States. However, after Canada and Mexico committed to addressing border security concerns, he quickly reversed this decision. Meanwhile, China is not immune to the wave of new tariffs. Last Tuesday, the US imposed a 10% tariff on some imported goods from China, and in response, China retaliated by imposing a 15% tariff on US goods. Although China has temporarily suspended some tariffs on cheap goods directly sent to US consumers, trade tensions between the two superpowers continue to escalate. Impact on Consumers and the Federal Budget When the new tax measures take effect, the United States Customs and Border Protection (CBP) will enhance inspections at 330 entry points nationwide – from airports, seaports to land border crossings. CBP officers will inspect shipments, review documents, and impose penalties for violations. The revenue from these taxes will be directly transferred to the United States Treasury General Fund. However, the main financial burden will fall on import businesses, forcing them to pass on this additional cost to consumers through price adjustments. Furthermore, according to JPMorgan's research, although some foreign manufacturers may reduce prices to support U.S. partners, the likelihood of price reduction is usually very limited and insufficient to offset the cost increase caused by tariffs. Regulations on Tax Exemptions and Economic Significance Under current regulations, some items may be exempt from duty if the way they are processed abroad meets certain standards. For example, products made in the U.S. and exported abroad and then returned without significant change are exempt from tariffs. Conversely, if the product is "upgraded" or "processed" abroad — such as gold being made into jewelry or car parts being assembled into cars — they will be subject to tariffs when imported again. In history, customs duties used to be the main source of revenue for the US federal budget. However, today they only contribute less than 3% of the government's total revenue. With these new measures, some estimates suggest that taxes from Canada, Mexico, and China could cause losses to US businesses of up to 1.1 trillion dollars over a decade. Specifically, by 2025, nearly 110 billion dollars could be collected from customs duties if Trump's plan is implemented. It is worth noting that the tax measures on China, which were applied from the early days of Trump's presidency and later expanded during President Biden's term, have now generated revenue of about $77 billion per year, albeit with significant negative impacts on the economy. Conclusion With the resumption of the trade war, Trump aims not only to rebalance the trade deficit but also to reaffirm the position of the United States on the international stage through retaliatory measures. However, experts warn that while these measures may create short-term benefits for the US economy, they can also lead to long-term consequences, negatively impacting consumers and disrupting the global supply chain. Partner countries and investors around the world are closely monitoring these developments, as Trump's decisions could change the global economic landscape in the future.