Where Do President Trump’s Trade Proposals Stand?

A Closer Look

Reciprocal: If it were to go through as planned, reciprocal tariffs would be the most widespread trade policy thus far. Under this proposal, the U.S. would mirror the tariffs imposed on U.S. exports of that country’s goods. For example, if items from the U.S. were taxed at a 5% rate when they were sent to the U.K., items from the U.K. would be taxed at 5% as they came into the U.S.

However, Trump has already walked back some of his original promises, saying he would be lenient on “a lot of countries.” It’s still unclear whether the reciprocal taxes would be a flat rate for an entire country or imposed on an item-by-item basis. These tariffs are set to kick in on April 2, so more information may be available then.

Automobiles: In his attempt to bring manufacturing back to the U.S., Trump is building a wall around U.S. automaking. The import tax on cars outside of the country will be permanent, and engines, transmissions, electrical components, and other parts are expected to be included. Parts that have been exempt under other tariff proposals that are included in the USMCA have a reprieve here, but it could be temporary, analysts said.

It’s unclear whether this manufacturing play will work. U.S. labor is still more costly than that of other countries. Analysts said that for many companies, it could still be cheaper to pay the tariff than to move vehicle manufacturing operations.

Pharmaceuticals: Trump has mentioned pharmaceutical tariffs in a number of press conferences but has not laid out any specific plans beyond the comments. At one point, Trump said import taxes on medications could be a tax of 25% or higher and could increase over a year to give companies an on-ramp. Prescription drug prices have been a particular area of concern for voters, but like with most tariffs, this could push up the price for those medications.