Reciprocal Tariffs Become a Double-Edged Sword for the US, Here's the Impact

KatadataOTO – Not long ago, United States President Donald Trump imposed reciprocal tariffs on a number of countries, including Indonesia.

The application of reciprocal tariffs means the US sets import tariffs on goods from other countries equal to what those countries charge the US for its exported goods.

According to Donald Trump, the US has suffered many losses caused by unequal reciprocity regarding import tariffs.

However, on the other hand, the US automotive industry could actually be harmed by this policy.

Photo : Ford

The US President did state that domestically assembled cars and trucks would not be subject to tariffs. However, no vehicle is truly locally made.

For context, the tariff on imported vehicles is set at 25 percent. Although many vehicles are assembled in the US, thousands of components in these cars and trucks are supplied from various other countries.

It is not uncommon for these components to cross borders multiple times, making it highly likely they will be subject to the new tariff.

As a result, consumers will ultimately have to bear the burden. This is because the imposition of tariffs increases production costs and the selling price of vehicles.