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US 'reciprocal tax' concept could threaten Asian exports

Alternative to mooted 20% impost on imports would disrupt global supply chains

| North America
U.S. President Donald Trump attends a meeting at the White House in Washington on March 31.

Lobbyists in Washington are lining up to argue for or against a proposal that the U.S. should impose a uniform 20% tax on imported goods and effectively grant exporters an equal tax break. While the outcome of this battle is still unclear, another proposal is taking shape with potentially better political prospects and its own major implications for Asian exports.

The idea of "reciprocal tax," floated by U.S. President Donald Trump and senior members of his administration, would introduce a bilateral element to the tax debate. Under a reciprocal tax framework, if Japan taxed electronics imports from the U.S. at 8%, that is the rate at which the U.S. would tax Japanese electronics imports.

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