President Donald Trump is set to unveil a new tariff strategy this week, which will align U.S. tariffs with those imposed by other countries, one which signals a departure from his previous plan to implement a uniform tariff on all imports, potentially adding more complexity to the nation’s trade policies.

Trump plans to switch from a universal tariff applicable to all nations to a varied tariff scheme depending on the country of origin, as Politico reports.

This announcement, which Trump made during a joint press event with Japanese Prime Minister Shigeru Ishiba, is expected to be detailed early this week. It presents a significant shift from his prior consideration of a flat tariff of either 10% or 20% across all imports.

New Tariff Approach to Launch

During the press briefing, Trump emphasized the importance of fair trading practices by proposing tariffs that mirror those faced by U.S. exports. "We don't want any more, any less," Trump stated, underscoring the intentions behind the proposal to level the playing field.

Currently, the United States sees disparities in tariffs on various products, such as automobiles, which have a rate of just 2.5% as opposed to higher tariffs by other nations.

To address this, Trump aims to partner with Congress to pass the Reciprocal Trade Act, granting the authority to adjust tariffs correspondingly.

The Reciprocal Trade Act was introduced in the House by a number of Republican representatives last month. This legislation seeks to offer the president the power to enforce tariffs equal to those that U.S. goods encounter abroad, aligning closely with Trump's trade priorities.

Potential for Complex Tariff Structures Emerges

This reciprocal approach is poised to create a matrix of tariffs that vary based on both the product and its country of origin, potentially leading to intricate trade regulations.

Trump believes this method is the only fair way forward, as indicated by his remark, "I think that's the only fair way to do it so that nobody's hurt."

Economic analysts caution that implementing such a multi-tiered system could spur legal challenges and may be perceived as a way to concentrate trade authority further within the executive branch, away from congressional oversight.

Trump has expressed his viewpoint clearly, stating, "If they charge us, we charge them. It’s the same exact amount." This principle of "an eye for an eye," extended to the realm of international trade, seeks to ensure that the tariffs are precisely reciprocal.

Implementation Faces Political, Legal Hurdles

The prospect of developing and enforcing a robust reciprocal tariff structure brings with it considerable complexity. Critics argue it could increase bureaucratic burdens and invite scrutiny on the balance of trade power as outlined in the U.S. Constitution.

This policy's development coincides with the administration's ongoing trade assessments, with a broad review initially slated for completion by April 1. The review's findings could further shape how these tariffs are structured and implemented.

Trump remains adamant about the need for this shift, positing that such a strategy would either force other countries to lower their tariffs on American goods or pay substantial fees to the U.S. economy. "Under the Trump Reciprocal Trade Act, other countries will have two options -- they’ll either eliminate their tariffs or face charges that could bring our nation significant revenue," Trump declared.

Impact on U.S. Foreign Trade Relations

As the U.S. prepares to embrace this new trade dynamic, foreign relations may be strained. Countries like India and China are among those specifically mentioned by Trump, who cited their high tariffs on American goods. By introducing equivalent tariffs, the administration hopes for a renegotiation of terms that will ultimately benefit American industries and consumers.

While proponents of the policy argue it champions fair trade, others in the international community and within the U.S. business sector fear potential retaliatory tariffs that could negatively impact global trade relations. They warn this could bring about new challenges and potentially escalate trade tensions.

Overall, the move away from a flat tariff to a more tailored and reciprocal approach represents a significant pivot in Trump's trade strategy, with ramifications yet to be fully understood in both domestic and international markets.

As Trump outlines these plans next week, stakeholders across various sectors will be closely watching for specific details and implications.