President Donald Trump issued an executive order calling for reciprocal tariffs on both allied and rival nations, arguing that many countries unfairly benefit from duty-free access to U.S. markets while taxing American goods. The order targets trading partners including Japan, India, the European Union and Britain.

Rather than immediately implementing specific tariff rates, the memorandum directs President Trump’s team to develop levies based on other nations’ existing tariffs on U.S. goods, along with factors like value-added taxes and industrial subsidies. Commerce Secretary nominee Howard Lutnick indicated the tariffs could take effect by April, though countries could avoid them by lowering their own tariffs.

The announcement came hours before the president’s scheduled meeting with Indian Prime Minister Narendra Modi, with Mr. Trump specifically criticizing India’s high tariff rates. He also condemned the European Union’s 20% value-added tax and made a controversial comment suggesting Canada would be better off as the 51st U.S. state.

The markets responded positively to the news since no immediate tariffs were imposed, with the Dow Jones Industrial Average gaining 300 points and other major indices closing higher. Some trade groups expressed relief at the measured approach, hoping it would lead to negotiations rather than immediate tariff increases.

This move follows Mr. Trump’s recent aggressive trade actions, including a 25% tariff on steel and aluminum, a threatened 25% tariff on all Mexican and Canadian goods tied to immigration and drug enforcement demands and a 10% tariff on Chinese imports. China has already retaliated with various tariffs on U.S. goods, while the EU and Canada have threatened to respond to Mr. Trump’s actions.

Mr. Trump defended the tariffs as necessary for bringing manufacturing back to America and creating jobs, claiming they would benefit the country in the long term despite potential short-term price increases. He emphasized that companies manufacturing in the U.S. would not face tariffs.

Read more: Trump orders reciprocal tariffs poised to hit EU and many other trading partners

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