qinbafrank
qinbafrank|Apr 03, 2025 05:37
Let's read the original text of the Trump Tariff Executive Order together: According to the presidential powers granted to me by the US Constitution and US laws, including the International Emergency Economic Powers Act (IEEPA), the National Emergencies Act (NEA), Section 604 of the 1974 Trade Act (19 America C. 2483), and Title 3, Section 301 of the United States Code, I, Donald J. Trump, the President of the United States, believe that the potential situations that exist, including the lack of reciprocity in our bilateral trade relationship, differences in tariff rates and non-tariff barriers, and economic policies by US trading partners that suppress domestic wages and consumption, as evidenced by the large and persistent annual US goods trade deficit, pose an extraordinary and exceptionally serious threat to US national security and economy. This threat is entirely or primarily caused outside of the United States, stemming from the domestic economic policies of major trading partners and structural imbalances in the global trading system. Based on this, I hereby declare a state of national emergency in response to this threat. On January 20, 2025, I signed the Presidential Memorandum on US Priority Trade Policy, directing the government to investigate the reasons for China's long-standing and persistent large annual trade deficit in commodity trade, including the economic and national security impacts and risks arising from this deficit, and to review and confirm unfair trade practices of other countries. On February 13, 2025, I signed a presidential memorandum titled "Reciprocal Trade and Tariffs," calling for further examination of our trading partners' non reciprocal trade practices and pointing out the relationship between these non reciprocal practices and trade deficits. On April 1, 2025, I received the final results of the above-mentioned investigation, and today I will take action based on these results. The long-standing and continuously expanding annual merchandise trade deficit in the United States has led to the hollowing out of our country's industrial manufacturing base, hindered our pace of expanding advanced domestic manufacturing capabilities, disrupted critical supply chains, and made our defense industrial base dependent on foreign adversaries. These huge and persistent trade deficits are mainly due to the lack of reciprocity in our bilateral trade relations. This can be seen from the differences in tariffs and non-tariff barriers between countries, which make it difficult for American manufacturers to sell their products in overseas markets; At the same time, the economic policies adopted by major trading partners of the United States have lowered domestic wages and consumption, thereby suppressing demand for American export products and artificially strengthening the competitiveness of their domestic products in the global market. These situations collectively gave rise to the national emergency that this order aims to alleviate and resolve. Historical Background Since 1934, US trade policy has been centered around the principle of reciprocity. Congress instructed the President to first obtain reciprocal treatment of reduced tariff rates from major trading partners through bilateral trade agreements, and then proceed within the framework of the global trading system. Between 1934 and 1945, the administrative department negotiated and signed 32 bilateral trade agreements aimed at reciprocal tariff reductions; Between 1947 and 1994, countries underwent eight rounds of negotiations, resulting in the General Agreement on Tariffs and Trade (GATT) and seven subsequent rounds of tariff reductions. However, despite commitments to follow the principle of reciprocity, trade relations between the United States and its trading partners have become extremely unbalanced, especially in recent years. There were three erroneous assumptions when the post-war international economic system was established: If the United States leads the way in reducing tariffs and non-tariff barriers, other countries will inevitably follow suit; This will ultimately promote economic convergence and bring the domestic consumption levels of US trading partners closer to the US level; Therefore, the United States will not experience a large and sustained trade deficit in goods. This system has triggered a series of events, agreements, and commitments, but these have not resulted in the expected reciprocity, nor have they led to a general increase in domestic consumption in foreign economies, resulting in the United States experiencing a huge and sustained annual trade deficit in goods, which has become a characteristic of the global trading system. In short, although member countries of the World Trade Organization (WTO) have agreed to bind tariff rates on a Most Favored Nation (MFN) basis and provide their most favorable tariff rates to all members, they have not agreed to bind tariff rates at the same lower level or set tariff rates on a reciprocal basis. As a result, the simple average most favored nation tariff rate in the United States is only 3.3%, which is at a lower level in the world, while many major trading partners (such as Brazil 11.2%, China 7.5%, EU 5%, India 17%, and Vietnam 9.4%) have significantly higher average most favored nation tariff rates. In addition, these average most favored nation tariff rates mask the tariff differences applicable by various economies to specific products. For example, the United States imposes a 2.5% tariff on imports of passenger cars (internal combustion engine models), while the European Union imposes a 10% tariff, India imposes a 70% tariff, and China imposes a 15% tariff. For network switches and routers, the United States implements a 0% tariff, but countries such as India impose a 10% tariff; Brazil's 18% and Indonesia's 30% tariffs on ethanol are much higher than the United States' 2.5%; Raw brown rice is subject to the most favored nation tariff of 2.7% (ad valorem) in the United States, while in India it is up to 80%, Malaysia 40%, and Türkiye 31% on average; Apple is tax-free in the United States, but it imposes 60.3% and 50% tariffs in Türkiye and India respectively. Similarly, non-tariff barriers deprive American manufacturers of reciprocal access to the global market. The 2025 National Trade Assessment Report provides a detailed list of numerous non-tariff barriers imposed by major US trading partners on US exports, which vary by trading partner and include import and licensing restrictions, deficiencies in customs and trade facilitation, technical trade barriers (such as unreasonable trade restriction standards, conformity assessment procedures or technical regulations), sanitary and phytosanitary measures that unreasonably restrict trade without enhancing security objectives, inadequate patent, copyright, trade secret and trademark systems and intellectual property protection and enforcement, discriminatory licensing requirements or regulatory standards, cross-border data flow barriers and discriminatory practices in digital product trade, investment barriers, subsidies, anti competitive behavior, favoritism towards domestic state-owned enterprises The government's negligence, bribery, and corruption in protecting labor and environmental standards.
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