1. Declaration of National Emergency and Background of Trade Imbalance
Recently, the U.S. government declared a national emergency to address the ongoing issue of export-import trade imbalance and the decline of domestic manufacturing. The U.S. trade deficit reached $1.2 trillion in 2024, attributed to unfair trade practices, non-tariff barriers, and low U.S. tariff rates that have undermined the principle of reciprocity. These issues are not only severely impacting the domestic economy but also national security, adversely affecting the U.S. manufacturing and investment environment.
2. Issues of Unfair Trade Practices and Non-Tariff Barriers
In trade relations between the U.S. and its major trading partners, the U.S. is subject to relatively low tariff rates (average of 3.3%), while countries such as Brazil, China, and India apply much higher tariff rates. In particular, non-tariff barriers such as technical standards, sanitary and phytosanitary standards, and data regulations pose significant constraints for U.S. manufacturers seeking to enter overseas markets. These factors collectively exacerbate the U.S.'s export-import trade imbalance and the decline of domestic manufacturing.
3. Introduction and Main Contents of the Reciprocal Tariff Policy
Following a presidential executive order, the U.S. has decided to impose a basic additional tariff of 10% on all imported goods. Subsequently, specific country-specific tariff rates (see Annex I) will be applied to certain trading partners, aiming to rectify the unfair tariff and non-tariff barriers of the trading countries. This policy is being pursued to strengthen U.S. manufacturing and the industrial base, and is expected to positively impact domestic economic recovery and investment promotion.
4. Linkages between Domestic Manufacturing, National Security, and Economic Growth
Persistent trade imbalance weakens the U.S. manufacturing base and leads to supply chain crises in the defense industry. The decline in domestic manufacturing also leads to a decrease in manufacturing jobs, which is related to the overall decline in economic productivity. The U.S. views manufacturing as a core driver of national security and economic growth, and aims to reduce reliance on foreign countries and promote technology and innovation through this reciprocal tariff policy. Along with this, the strategy is to induce an increase in domestic investment and research and development (R&D) to promote the long-term growth of the economy.
5. Ripple Effects and Future Outlook of the Policy
The new tariff policy aims to restore manufacturing in the U.S. and resolve trade imbalances. In the short term, the possibility of retaliatory measures from overseas trading partners must be considered. However, in the long term, the additional tariff measures put in place could be a significant turning point in creating a stable investment environment through strengthening the domestic economy, as well as in terms of economic and trade security. Key economic keywords such as economy, trade, export-import, manufacturing, and investment are expected to have a significant impact on the success of this policy and future changes in the international economic order.
In this way, the U.S. government is simultaneously promoting the recovery of the national economy and strengthening national security through strong measures to resolve trade imbalances and revitalize domestic manufacturing. It is necessary to pay attention to what specific results these policies will lead to in the future.
Leave a Reply