President Donald Trump signed a memorandum Thursday laying the groundwork for implementing new tariffs on foreign countries with which the United States sees a negative trade balance.

The White House had teased this specific tariff announcement for days, following Trump’s abrupt preview last week that he would be pursuing a reciprocal trade agenda. White House officials claim that the new policy could yield up to roughly $1 trillion in new annual revenue.

“The idea that the United States has one of the most open economies and has among the lowest average weighted tariff rates in the world,” Trump’s memorandum reads. “The United States imposes fewer barriers to imports than other major world economies, including those with similar political and economic systems.”

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“Whatever countries charge the United States of America, we will charge them,” the president declared during his Oval Office signing ceremony. “We’re going to make America rich again.”

Senior White House officials said that, unlike Trump’s recently announced 25% tariffs on steel and aluminum imports, the reciprocal tariffs will be determined on a country-by-country basis.

“That will depend on their profile with respect to the following tariffs imposed on United States products, and unfair, discriminatory, or extraterritorial taxes imposed by our trading partners, including a value added tax,” a senior White House official said ahead of the president’s announcement.

There is no set timeline for implementation of these new tariffs, according to the White House. Instead, Trump’s top economic advisors, including Commerce Secretary Howard Lutnick, United States Trade Representative Jamieson Greer, Treasury Secretary Scott Bessent, National Economic Council Kevin Hassett, and White House senior counselor for Trade and Manufacturing Peter Navarro, will make recommendations to the president in the coming weeks and months. In layman’s terms, new tariffs will be announced “in Trump time,” as characterized by White House officials.

Homeland Security Secretary Kristi Noem will also be involved in those discussions, as DHS and Customs and Border Protection are responsible for collecting tariff revenue, though Trump has floated creating a new External Revenue Service to take on those responsibilities in the future.

White House aides confirmed that they expect foreign nations to negotiate down Trump’s reciprocal taxes by lowering their import fees on U.S. goods. The White House did not say if Trump would consider dropping tariffs in exchange for non-trade-related concessions.

“We expect every country to take action, because it’s patently obvious on its face that they are cheating us,” a senior White House official said. “Just look at the annual more than $1 trillion trade deficit that ships our assets off, as well as our factories and jobs, to foreign nations. So if we can balance our trade, that’s a trillion-dollar gain annually.”

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The United States ran trade deficits with nine of its top 10 trading partners in 2024, accounting for nearly $1.1 trillion. That includes a $295.4 billion deficit with China, $171.8 billion with Mexico, $123.5 with Vietnam, $84.8 billion with Germany, $73.9 billion with Taiwan, $68.5 billion with Japan, $66 billion with South Korea, $63.3 billion with Canada, and $45.7 with India. The U.S. also ran a $86.7 billion deficit with Ireland, its 11th largest trade partner, last year. The United Kingdom was the U.S.’s ninth largest trading partner in 2024, but America enjoys a roughly $10 billion surplus with the U.K.

White House officials, including Trump’s top trade advisor Peter Navarro, have claimed that the president’s reciprocal tariffs also seek to mitigate the negative impacts of value-added taxes, used by the European Union and other major trade partners.

“Did you know when you ship a car from the US to Europe, if they let it in at all because they have many non-tariff barriers, between the VAT and duties, that car is taxed at 30%?,” White House deputy chief of staff Stephen Miller said in a recent interview. “The German car — or a European car sent to America is taxed at 2.5% — or basically 0.”

However, the nonpartisan Tax Foundation argues that Trump’s reciprocal strategy “reflects a complete misunderstanding of what a VAT is and how it works.”

“Worse, it misplaces the blame for a lack of US competitiveness on the European VAT instead of reevaluating the flaws of both the US federal and state tax systems,” Tax Foundation’s Vice President of Global Projects Sean Bray said Wednesday. “The EU’s VAT system should not be used as a justification for retaliatory tariffs.”

Wednesday’s announcement comes just days after the president signed proclamations placing 25% tariffs on steel and aluminum imports, in addition to “downstream” products including fabricated structural steel, pressed concrete steel strands, and aluminum extrusions. Those are set to go into effect in mid-March to ensure that goods already in transit are not subject to the levies, according to senior White House officials.

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And though Trump has floated some exemptions to those tariffs for allies, like Australia which has a trade surplus with the United States, White House officials responsible for crafting the policies remain adamant that no exemptions are currently on the table.

Navarro claimed Tuesday that exemptions to Trump 1.0-era tariffs granted by the Biden administration “opened the barn doors” and that the president is committed to keeping these “permanent.”

“‘You fool me once,’ you know the expression, ‘we’re not going to be fooled again,’” he stated. “We’ve got an international trade crisis because of a $1 trillion a year trade deficit that’s draining our assets and weakening us that’s got to be dealt with.”

Beyond trade, Trump has used tariffs as a blunt instrument in negotiations with Canada, Mexico, and China to address the migration and fentanyl crises. 

After announcing 25% tariffs on the import of all goods from Canada and Mexico, Trump received concessions on border security and the drug war from both Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum, leading the president to pause implementation for 30 days.

Trump did proceed with 10% tariffs on all goods imported from China, and Beijing responded by placing 10-15% tariffs on American crude oil, liquified natural gas, farm machinery, and other select products.

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Trump’s National Security Advisor Mike Waltz confirmed that additional tariffs are on the table for any Arab countries that decline to resettle Palestinian refugees as requested by the president.

“I think President Trump views tariffs as a key tool for our foreign policy,” he told the Washington Examiner.