White House Pushes Off Reciprocal Import Tariffs

President Trump moved Feb. 13 to lay the groundwork for the possible imposition of reciprocal tariffs on imports from individual countries based on their tariffs on U.S. goods. However, it appears that any such tariffs will not be levied for at least several months.

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A new presidential memorandum states that in an effort to reduce the U.S.’ “large and persistent annual trade deficit in goods,” and to address “other unfair and unbalanced aspects of our trade with foreign trading partners,” the Department of Commerce and the Office of the U.S. Trade Representative will lead an effort to investigate the harm to the U.S. from any non-reciprocal trade arrangements adopted by any trading partners. That investigation will not begin until at least April 1, which is the due date for a number of reports on various trade-related issues, and no deadline was specified for its completion.

According to the memorandum, the investigation will be “comprehensive” and examine the following.

– tariffs imposed on U.S. products

– unfair, discriminatory, or extraterritorial taxes imposed by trading partners on U.S. businesses, workers, and consumers, including a value-added tax

– costs to U.S. businesses, workers, and consumers arising from non-tariff barriers or measures; unfair or harmful acts, policies, or practices, including subsidies; and burdensome regulatory requirements on U.S. 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

– other mercantilist policies that make U.S. businesses and workers less competitive

– any other practice deemed to impose any unfair limitation on market access or any structural impediment to fair competition with the market economy of the U.S.

The memorandum said this investigation will be used to determine “the equivalent of a reciprocal tariff with respect to each foreign trading partner,” thus suggesting that such tariffs would not be imposed on a product-by-product basis, which would likely be highly difficult to implement. There was no indication on when any such tariffs might actually be imposed.