US President Trump extended his economic war against the rest of the world yesterday launching an investigation into the imposition of a system of “reciprocal tariffs” which could be implemented at the beginning of April.

The move, which goes beyond the imposition of a flat tariff on all nations, threatens to shatter what remains of the global trading system that has been in operation since 1947. It is aimed at establishing an economic and political bloc subservient to the US as it deepens its drive to maintain global hegemony, above all against what it perceives as the threat posed by China.

While it goes under the title “reciprocal tariffs, the latest Trump move in the expanding economic war involves far more than tariffs. In determining the tariffs to be invoked, the US Commerce Department would deem what economic and regulatory policies of the particular country or the European Union it considers “unfair” to the US and develop tariff hikes accordingly.

In addition to tariffs levelled against US goods, this would also cover issues such as subsidies, tax incentives, environmental regulations, currency values in relation to the US dollar, the trade balance with the US, value added taxes, intellectual property protections and regulations covering the operations of high-tech and social media companies.

Announcing the investigation in the Oval Office, Trump said: “I’ve decided, for the purposes of fairness, that I will charge a reciprocal tariff, meaning whatever countries charge the United States of America. In almost all cases, they’re charging us vastly more than we charge them, but those days are over.”

Elaborating further and indicating the wide scope of the investigation, he said: “The European Union has been very tough on our companies. They sued Apple, they sued Google, they sued Facebook. The court system over there is not very good to our companies.”

The implications of such statements are clear. Anything in the internal policies of another country which the administration considers detrimental to the interests of the US and its corporations will make it a target for a reciprocal tax, not just its tariffs on US goods.

An unnamed official said Trump had not ruled out a “universal” tariff, but for the present he has decided to pursue reciprocal treatment.

Trump told reporters he would enact import taxes on cars, semiconductors and pharmaceuticals “over and above” the reciprocal tariffs at a later date. Laying out one of the objectives of the measure, he said: “If you build your product in the United States, there are no tariffs.”

The change in tack from a universal tariff to reciprocal tariffs is bound up with the overall US strategy, which is to form a bloc aligned with it in the conduct of its economic war. A universal tariff would tend to draw countries together whereas reciprocal action means deals can be done with individual countries to pull them into the US orbit.

The Trump move abrogates the “most favoured nation” principle set in place after World War II, in which it was determined that concessions granted to one country had to be granted to all. This was aimed at preventing the formation of discriminatory trading and currency blocs that had developed in the 1930s and which played no small part in creating the conditions for World War II.

Equalisation of tariffs means that a number of countries are in the immediate firing line because their tariffs on imported US goods are higher than those on the goods they send to the American market.

India, Brazil, Vietnam, Argentina and many Southeast Asian and African nations will be hit.

But the broad scope of the assessment, to include internal economic policies, laws and regulations to determine whether they are deemed to be “unfair” to the US, means that nations such as Japan and members of the European Union could take a major blow.

China will also be in line because, while its tariff rate is lower than that of the US, it has policies and regulations in place which the US considers inimical to its interests. State support for key industries which the US, along with others, maintains gives China an unfair advantage in global markets is one of these.

A close ally of Trump in his economic war Bill Hagerty, a Republican senator from Tennessee, told the Wall Street Journal: “Subsidies and regulatory barriers are every bit as impactful as tariffs themselves.”

The value-added tax (VAT) imposed by the European Union will be a major target of the investigation.

Peter Navarro, the president’s senior trade counsellor and one of foremost advocates of the “America First” agenda, with a particular animus towards China, has called the EU’s VAT the “poster child” for unfair trade directed against America. He has said that this has allowed Germany to export many more cars to the US than it bought from it.

“President Trump is no longer willing to tolerate that. The Trump fair and reciprocal plan will put a swift end to such exploitation of American workers,” Navarro stated.

The Trump action has nothing to do with protecting American workers. It is directed to upholding and advancing the position of US corporations in the battle for global markets.

The American worker, already battling under the impact of the highest inflation in four decades, is going to be hit further by the Trump tariff measures. An initial estimate by Capital Economics is that inflation, which is already showing an uptick, could rise to above 4 percent this year.

Trump has acknowledged that his tariff measures will raise prices in the “short term” but has claimed, without any evidence, that “prices will also go down.”

And yesterday he again repeated one of the “big lies” of his economic agenda, saying tariffs are going to “make our country a fortune.” This is based on the claim that tariffs are paid for by foreign countries and corporations when in fact they are paid by US importers and American consumers.

The investigation will be carried out by Trump’s nominee for commerce secretary Howard Lutnick and his designated trade representative Jamieson Greer. They have been tasked with reporting by early April.

A number of pieces of US legislation could be utilised including Section 302 of the Trade Act, which relates to national security, Section 301 which deals with unfair trading and the International Emergency Powers Act.

Major powers, the EU, Japan and China, have yet to respond but they have been given a clear message: Subordinate yourselves to the US and change your economic and regulatory policies to meet its demands or you will be faced with crippling trade war measures.