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President Donald Trump signed an executive order Thursday under which the U.S. would increase tariffs to match those that other countries charge on imports, the Associated Press reported.
“I’ve decided for purposes of fairness that I will charge a reciprocal tariff,” Trump said at the proclamation signing in the Oval Office, as reported by the AP. “It’s fair to all. No other country can complain.”
According to the AP, increases in tariffs will be customized for each country, with an eye toward negotiations, but those countries may choose to impose their own retaliatory tariff hikes, and the increased costs would be passed on to businesses and consumers in the U.S.
ADWEEK previously reported that most agencies were awaiting further developments before adjusting their strategies due to tariffs, although some advertisers were more reactionary, delaying product launches and reassessing their priorities in the U.S.
Earlier this month, Trump imposed a 10% tariff on goods from China, citing its role in fentanyl production. Canada and Mexico were also hit with 25% tariffs that were put on hold for 30 days.
China counterpunched swiftly, imposing tariffs on agricultural machinery, energy, and large-engine automobiles from the U.S., as well as launching an antitrust investigation of Google, the AP reported.
The head of investment at an independent agency, who asked not to be named, told ADWEEK earlier this month, “Given Trump’s history of unpredictable policy shifts, preparing for any specific outcome is challenging. There’s always the possibility that these tariffs could be rolled back if the administration negotiates concessions from affected countries, making any preemptive action premature.”
Stephani Estes, chief media officer at agency Goodway Group, warned, “Brands are likely to feel the impact of both the increase in costs from the tariffs, as well as the potential for reduced consumer spending. For some brands, that may mean that marketing budgets will be squeezed.”
The AP reported that Trump also removed exemptions from his 2018 steel and aluminum tariffs earlier this week, and the president has discussed tariffs on computer chips and pharmaceutical drugs.