President Trump Announces Reciprocal Trade and Tariffs
On February 13, 2025 The White House published two articles specific to reciprocal trade and tariffs. These two articles; Reciprocal Trade and Tariffs Memorandum, and President Donald J. Trump Announces “Fair and Reciprocal Plan” on Trade Fact Sheet have been summarized below. If you wish to review the complete announcements , please click on the titles above.
Reciprocal Trade and Tariffs Memorandum
This memorandum, was issued to seven government departments and is divided into five sections.
Section 1: Background
- The United States has one of the most open economies and has among the lowest average weighted tariff rates in the world
- The United States imposes fewer barriers to imports than other major world economies, including those with similar political and economic systems
- 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
- As noted in the Presidential Memorandum of January 20, 2025 (America First Trade Policy Memorandum) this situation is untenable.
- The trade deficit of the United States threatens our economic and national security, has hollowed out our industrial base, has reduced our overall national competitiveness, and has made our Nation dependent on other countries to meet our key security needs.
Section 2: Policy
It is the policy of the United States to reduce our large and persistent annual trade deficit in goods and to address other unfair and unbalanced aspects of our trade with foreign trading partners. In pursuit of this policy,
I will introduce the “Fair and Reciprocal Plan”(Plan).
President Trump
Under the Plan, my Administration will work strenuously to counter non-reciprocal trading arrangements with trading partners by determining the equivalent of a reciprocal tariff
with respect to each foreign trading partner.
This reciprocal trade and tariffs approach will be of comprehensive scope, examining non-reciprocal trade relationships with all United States trading partners, including any:
- tariffs imposed on United States products
- unfair, discriminatory, or extraterritorial taxes imposed by our trading partners on United States businesses, workers, and consumers, including a value-added tax
- costs to United States businesses, workers, and consumers arising from nontariff barriers or measures and unfair or harmful acts, policies, or practices, including subsidies, and burdensome regulatory requirements on United States businesses operating in other countries
- policies and practices that cause exchange rates to deviate from their market value, to the detriment of Americans; wage suppression; and other mercantilist policies that make United States businesses and workers less competitive
- any other practice that, in the judgment of the United States Trade Representative, in consultation with the Secretary of the Treasury, the Secretary of Commerce, and the Senior Counselor to the President for Trade and Manufacturing, imposes any unfair limitation on market access or any structural impediment to fair competition with the market economy of the United States
Section 3: Taking Action
Within 180 days of the date of this memorandum, the Director of the Office of Management and Budget shall assess all fiscal impacts on the Federal Government and the impacts of any information collection requests on the public, and shall deliver a reciprocal trade and tariffs assessment in writing to the President.
Section 4: Definitions
For the purposes of this memorandum:
(a) “Value-added tax” means a type of consumption tax that is levied on the incremental increase in value of a good or service at each stage of the supply chain.
(b) “Nontariff barrier” or “measure” means any government-imposed measure or policy or nonmonetary barrier that restricts, prevents, or impedes international trade in goods, including import policies, sanitary and phytosanitary measures, technical barriers to trade, government procurement, export subsidies, lack of intellectual property protection, digital trade barriers, and government-tolerated anticompetitive conduct of state-owned or private firms.
Section 5: General Provisions
- This memorandum shall be implemented consistent with applicable law and subject to the availability of appropriations
- This memorandum is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person
- The United States Trade Representative is authorized and directed to publish this memorandum in the Federal Register
Fact Sheet: President Donald J. Trump Announces “Fair and Reciprocal Plan” on Trade
THE “FAIR AND RECIPROCAL PLAN”: Today, President Donald J. Trump signed a Presidential Memorandum ordering the development of a comprehensive plan for restoring fairness in U.S. trade relationships and countering non-reciprocal trading arrangements.
The “Fair and Reciprocal Plan” will seek to correct longstanding imbalances in international trade and ensure fairness across the board. There are endless examples where our trading partners do not give the United States reciprocal treatment.
- The U.S. tariff on ethanol is a mere 2.5%. Yet Brazil charges the U.S. ethanol exports a tariff of 18%. As a result, in 2024, the U.S. imported over $200 million in ethanol from Brazil while the U.S. exported only $52 million in ethanol to Brazil.
- The U.S. average applied Most Favored Nation (MFN) tariff on agricultural goods is 5%. But India’s average applied MFN tariff is 39%. India also charges a 100% tariff on U.S. motorcycles, while we only charge a 2.4% tariff on Indian motorcycles.
- The European Union can export all the shellfish it wants to America. But the EU bans shellfish exports from 48 of our states, despite committing in 2020 to expedite approvals for shellfish exports. As a result, in 2023, the U.S. imported $274 million in shellfish from the EU but exported only $38 million.
- The EU also imposes a 10% tariff on imported cars. Yet the U.S. only imposes a 2.5% tariff.
- Though America has no such thing, and only America should be allowed to tax American firms, trading partners hand American companies a bill for something called a digital service tax. Canada and France use these taxes to each collect over $500 million per year from American companies.
Overall, these non-reciprocal taxes cost America’s firms over $2 billion per year. Reciprocal trade and tariffs will bring back fairness and prosperity to the distorted international trade system and stop Americans from being taken advantage of.
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