Trump aims trade fight at Europe, U.K. and India: ‘This should have been done years ago’

President Trump signed an order Thursday that calls for reciprocal tariffs on friendly and rival nations alike, saying too many are taking advantage of duty-free treatment in the U.S. as they tax American goods that flow across their borders.

The tariffs would likely hit trading partners such as Japan, India, the European Union and Britain.

The memorandum orders Mr. Trump’s team to devise levies based on the tariffs nations impose on U.S. goods and on factors such as value-added taxes or subsidies that nations give their industrial sectors.

“This should have been done years ago,” Mr. Trump said in the Oval Office.

The memo served as a marching order for advisers rather than a roster of tariffs at specific percentages. The maneuver will supercharge the administration’s risky trade wars with other nations and likely prompt industries to seek carve-outs.

Howard Lutnick, whom Mr. Trump picked to lead the Commerce Department, said the tariffs could go into effect by April, but countries could avoid the levies by lowering theirs.

“For many years, the United States has been treated unfairly by trading partners, both friend and foe,” the memorandum says. “This lack of reciprocity is one source of our country’s large and persistent annual trade deficit in goods — closed markets abroad reduce United States exports and open markets at home result in significant imports.”

Some groups latched onto the wiggle room afforded by the announcement.

“It’s a relief that the administration isn’t rushing to impose new tariffs, and we welcome the president taking a more nuanced, interagency approach,” said Tiffany Smith, vice president for global trade policy at the National Foreign Trade Council. “Ideally, this process will result in us working with our trading partners to lower their tariffs and trade barriers as opposed to increasing our own.”

The markets responded positively because new tariffs weren’t imposed Thursday.

The Dow Jones Industrial Average finished the day up 300 points, and the S&P 500 and Nasdaq Composite also closed in positive territory.

Mr. Trump announced the move hours before he hosted a White House visit by Indian Prime Minister Narendra Modi, whose country charges high tariffs on incoming goods.

“They charge more tariffs than any other country. We’ll be talking about that,” Mr. Trump said.

The president condemned a 20% value-added tax imposed by the European Union and other restrictive moves on the Continent.

He also said Canada would be better off as the 51st U.S. state.

The maneuver will supercharge the administration’s risky trade wars with other nations and likely prompt industries to seek carve-outs.

Tariffs are taxes or duties paid by importers on the goods they bring in from foreign markets.

Mr. Trump is using tariffs to force companies to return to America or keep their operations in the U.S., employ American workers and create revenue to fund domestic programs.

“If you build your product in the United States, there are no tariffs,” Mr. Trump said. “Tariffs are good. Tariffs are great, actually.”

Yet tariffs can raise costs along the supply chain.

Foreign countries don’t pay the tariffs directly to the U.S. Treasury. In many cases, U.S. companies pay the levies and might pass on at least some of the costs to consumers through higher prices.

Mr. Trump campaigned last year on a promise to bring down consumer prices that rose under President Biden.

“Prices could go up short term, but prices will also go down,” Mr. Trump said. “Long term, it’s going to make our country a fortune.”

The president said he had spoken with American CEOs, and they “love it.”

Mr. Trump’s reciprocal tariffs cap an aggressive month on trade.

On Monday, the president imposed a 25% tariff on steel and aluminum and vowed a sweeping 25% tariff on all goods from Mexico and Canada if they don’t meet his immigration and drug enforcement demands, a threat with sweeping implications for the auto industry.

The president also has imposed a 10% tariff on all imports from China. Beijing has responded with tariffs of 15% on coal and liquefied natural gas products and 10% on crude oil, agricultural machinery and large-engine cars from the U.S.

Other foreign targets, including the European Union and Canada, have called Mr. Trump’s action unjustified and threatened to retaliate.

Mr. Trump said it was only fair to treat other countries the way they treat Americans.

“It’s a beautiful, simple system,” Mr. Trump said.