On February 7, President Donald Trump announced<\/a> his intention to unveil a \u201creciprocal tariff\u201d system sometime next week, so that the United States is \u201ctreated evenly with other countries.\u201d Trump didn\u2019t provide details of how such a system would work. But it appears he wants US tariffs on countries\u2019 imports to match their tariffs on US exports: \u201cThey charge us. We charge them. It\u2019s the same thing.\u201d<\/p>\n Such a system raises a host of legal, economic, and practical concerns, but, being a Friday afternoon and all, I just have two basic questions for now:\u00a0<\/p>\n First, does this mean that the US government will <\/strong>reduce<\/strong><\/em> tariffs on imports from the many countries that have lower tariffs than we have?\u00a0<\/strong> As Figures 1 and 2 show for trade in manufactured goods and other non-agricultural goods, the United States does not<\/em> have the lowest tariffs in the world and instead ranks somewhere in the middle among wealthy, industrialized countries. (Tellingly, only really poor countries have very high tariffs, but that\u2019s a discussion for another time.)\u00a0Should Trump\u2019s system be based on average tariff rates, then \u201ctrue\u201d reciprocity would require US tariff rate reductions on goods from dozens of countries.\u00a0<\/p>\n As seen in Table 1, moreover, a country-to-county comparison would raise similar questions. There, we see that tariffs applied on US non-agricultural exports by the United States\u2019 top export markets are about the same\u2014sometimes a little higher, but also sometimes a little lower (see bold\/\u200bitalic numbers)\u2014as those applied by the United States on the same goods from the same places.<\/p>\n By this metric, a new reciprocal system means reduced<\/em> US tariffs on manufactured goods from Europe, Mexico, Canada, or the UK, where, depending on how you measure the average, tariffs are actually lower than what the United States applies.<\/p>\n Second, will there be reciprocity for the <\/strong>other<\/strong><\/em> protectionism?\u00a0<\/strong> As I wrote a few months ago:<\/p>\n \u2026Washington uses many \u201cnon-tariff\u201d measures to impede foreign competition. This\u00a0includes<\/a>\u00a0subsidies, quotas, \u201cBuy American\u201d restrictions, the Jones Act (drink!), and regulatory protectionism like the\u00a0FDA\u2019s blockade on baby formula<\/a>. We\u2019re also one of the biggest users of \u201ctrade remedy\u201d measures (anti-dumping<\/a>, especially) and today apply more than\u00a0700 special duties<\/a>\u00a0on mainly manufactured goods like steel and chemicals.<\/p>\n<\/blockquote>\n\n
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