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Reciprocal tariffs function by matching tariffs imposed on U.S. imports by foreign countries. If another nation levies higher taxes on American products, the U.S. will retaliate similarly, with the goal of leveling the playing field. Trump emphasized that building products domestically would exempt companies from tariffs, incentivizing U.S. manufacturing.
The move is expected to impact countries like the European Union, India, Japan, and other Asian economies, which currently maintain high tariffs on American goods, especially automobiles and agricultural products. Critics warn that these measures could ignite retaliatory trade battles, raising costs for American consumers and industries.