President Donald Trump has announced sweeping reciprocal tariffs on all U.S. trading partners “for purposes of fairness.”

Speaking from the Oval Office on Feb. 13, the president confirmed that he will implement a matching tariff on whatever amount countries charge the United States.

“It works out very well,” Trump told reporters. “It’s a beautiful, simple system, and we don’t have to worry about charging too much or too little.”

The tariffs could go into effect as early as April 2 following the completion of a study, Howard Lutnick, Trump’s nominee for secretary of the Department of Commerce, said while speaking alongside the president in the Oval Office.

“Traditionally, India is right at the top of the pack,” Trump told reporters, noting that the United States cannot sell Harley-Davidson products in India because tariffs are high.

He made the comments before his meeting with Indian Prime Minister Narendra Modi at the Oval Office on Feb. 13.

“They charge more tariffs than any other country,“ Trump said. ”We'll be talking about that.”

The president also singled out Taiwan, saying all chip production had moved to Taiwan from the United States and that he wanted to bring manufacturing back to the country.

In 2023, Taiwan’s overall average nominal tariff rate for imported goods was 6.34 percent, ranging between 4.13 percent for industrial products and 15.06 percent for agricultural products.

Over the past few years, BRICS—a group of emerging markets led by Brazil, Russia, India, China, and South Africa—has championed anti-U.S. dollar initiatives, including settling bilateral trade in local currencies.

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On Feb. 13, Trump declared that “BRICS is dead.”

The president has repeatedly vowed to tariff countries if they engage in de-dollarization efforts. And shortly after the November 2024 election, he threatened to impose tariffs on BRICS nations that tried to replace the U.S. dollar as a reserve currency.

He told reporters that BRICS was established “for a bad purpose” but that now the members refrain from discussing the anti-dollar bloc.

“They’re afraid to talk about it because I told them, if they want to play games with the dollar, then they’re going to be hit with a 100 percent tariff,” Trump said.

“We have them over a barrel.”

However, some observers said they believe that Trump’s tariff strategy may push other nations to diversify from the dollar.

“I think that the countries who are the subject of tariffs and potential punitive tariffs will try to diversify out of dollars and into another asset in terms of their reserve currency,” Chris Mancini, a portfolio manager at the Gabelli Gold Fund, wrote in a recent note.

A VAT differs from a sales tax because the latter is charged at the point of sale.

With the EU’s average standard VAT rate at 21.8 percent, the White House stated that tariff rates on U.S. exports entering the region are nearly triple that.

Lutnick called it an “export subsidy” because the EU will drop the VAT when it sells to the United States.

“So we are going to address each country one by one, but here’s the key: They'll get an invitation to trade with the greatest consumer economy in the world,” Lutnick told reporters.

“In exchange for trading with the greatest consumer economy in the world, you have to treat us the way we’re going to treat you.”

U.S. cars shipped to the EU are subject to a 10 percent tariff. In contrast, European cars entering the United States face a 2.5 percent levy.

If the VAT is taken into consideration, the countries that will see a jump in U.S. tariffs will be India, Argentina, South Africa, and the European countries, according to a Deutsche Bank analysis.

The White House provided examples of where the United States could impose reciprocal tariffs.

Brazil’s ethanol exports are tariffed at 2.5 percent, but the South American country tariffs U.S. ethanol exports at 18 percent. Last year, the United States imported more than $200 million in ethanol from Brazil, while the world’s largest economy exported $52 million in ethanol to Brazil.

Pharmaceuticals and semiconductors could also be affected by the latest initiative, Trump said.

According to Trump, Taiwan took U.S. chip businesses, and China has taken U.S. pharmaceutical manufacturing.

“We want it back in the United States,” he told reporters. “If they don’t bring it back, we’re not going to be very happy.”

“Prices could go up somewhat short term, but prices will also go down,” he said. “So Americans should prepare for some short-term pain.

“Ultimately, prices will stay the same or go down.”

While he said he believes that there could be some “short-term disturbance,” the president said the United States will benefit in the long term.

Trump said he believes that these tariff policies will create more employment in the United States.

“We know that jobs are going to be produced at levels that we haven’t seen before,” Trump said.

The president also projected that his economic agenda would help bring interest rates down.

Last month, the Federal Reserve kept interest rates unchanged, and the latest inflation reports have prompted investors to rethink their monetary policy expectations. The futures market is penciling the next quarter-point interest rate for September.

Fed Chair Jerome Powell, who testified before Congress this week, indicated that the institution is not hurrying to lower interest rates until there is progress on inflation.

The president called for lower rates in a Feb. 12 Truth Social post.

When questioned about the revenue generated by the administration’s tariffs, Trump said that it would be “a staggering amount.”