By David J. Lynch, Rachel Siegel, Anthony Faiola · The Washington Post (c) 2025
President Donald Trump on Thursday continued his relentless remaking of U.S. trade relations, announcing a new policy of taxing foreign goods at the same rate that other nations apply to American products that could start in the coming weeks or months.
The president billed his new “reciprocal” tariff policy – cemented in an executive order – as a straightforward response to unfair behavior by U.S. trading partners, who in some cases apply higher tariffs to specific American goods than the United States applies to the same products from those countries.
“If you build your product in the United States, there are no tariffs,” Trump said from the Oval Office. He said the moves would be applied on top of previously announced steel and aluminum tariffs, adding that these kinds of policies “should have been done years ago.”
But administering a new regime of different taxes for each country could prove a bureaucratic nightmare and increase costs for Americans, trade analysts said.
“Reciprocity may sound appealing. But remember who pays tariffs: It’s the American importer and the burden eventually falls on the consumer,” said Erica York, vice president of federal tax policy for the Tax Foundation. “It’s like shooting yourselves in the foot because someone else is shooting themselves in the foot.”
It’s unclear exactly how the tariffs would be implemented, and the delayed timing could leave opportunities for nations to negotiate with Trump over the reciprocal tariffs.
In customizing the tariffs to specific countries, White House officials said they would look at tariffs imposed on U.S. products, other regulatory requirements, various kinds of taxes and exchange rates. Countries that the United States has the highest trade deficits with could be examined first; officials said they expect the process to take weeks or a few months, but not much longer.
In practical terms, Trump’s approach amounts to scrapping the decades-long U.S. promotion of low tariffs on most items, which policymakers from both parties have credited with giving American consumers access to inexpensive goods from all over the world.
The president, however, says the higher foreign tariffs are a barrier to U.S. exports of cars to Europe, motorcycles to India and meat and dairy items to Brazil. That uneven playing field helps explain the chronic U.S. trade deficit, which last year hit a record $1.2 trillion.
“They’ve charged us and we haven’t charged them. And, it’s time to be reciprocal. You’ll be hearing that word a lot. Reciprocal. If they charge us, we charge them,” he told reporters earlier this week. “If they’re at 25 [percent], we’re at 25. If they’re at 10, we’re at 10. If they’re much higher than 25, that’s where we are too.”
The United States and other major developed nations such as Canada, Germany and Japan have similar weighted average tariff rates of around 1.5 percent, according to the World Bank.
But some nations maintain higher tariffs on select products. The European Union, for example, imposes a 10 percent tax on vehicles imported from the United States – four times the 2.5 percent levy the U.S. assesses on European cars that land here.
As Trump escalated his tariff threats in recent weeks, European officials debated making an offer to drop the E.U. tariff to the lower U.S. mark, a sign that the president’s strategy already was working, according to his allies.
The president, however, may want to keep the higher tariffs rather than negotiate them away. He has often spoken of tariffs as a tool to raise government revenue, allowing for offsetting reductions in income taxes.
“I’m skeptical that the real goal is to get others to lower their trade barriers. Trump’s real goal is higher tariffs,” York said.
Others raised concerns about the path of free trade itself. Eswar Prasad, an expert on international trade policy at Cornell University, said it was “remarkable” to see the United States, which was key to designing the rules underpinning the global trading system, now moving in the other direction.
“The broad and sweeping nature of the tariff proposals, which encompass a broad range of products and a majority of U.S. trading partners, could spell the end of free trade as we have come to know it,” he said.
Trump’s proposal also takes aim at Europe’s value-added tax.
European officials have been caught between two instincts: hawkishly pushing back against tariffs or finding ways to assuage Trump and minimize the damage. The latter is exemplified by the suggestion of reducing the E.U. import tariff on cars, an idea that has gained serious traction in Brussels. European officials have been making diplomatic entreaties in Washington, and may also be willing to offer increased purchases of American energy.
But the numbers haven’t helped. This week, data show that Germany, Europe’s export behemoth, posted a record $72 billion trade surplus last year with the United States.
Trump has highlighted American autos and food as goods that Europeans should buy more of, but don’t. But there are no guarantees European consumers would step up purchases even if tariffs were lower.
“Our infrastructure isn’t really made for those U.S. cars; they also consume a lot more fuel as they are just so much bigger than the cars we have here,” said Inga Fechner, senior economist with ING in the Netherlands. “I doubt that lower tariffs would convince more Europeans to buy American SUVs.”
Some developing nations maintain much higher tariff rates to protect their domestic industries. India applies tariffs of 60 percent on automobiles and flowers, and 50 percent on apples, corn and motorcycles, according to the office of the U.S. Trade Representative.
Indian Prime Minister Narendra Modi is scheduled to arrive in Washington on Wednesday for talks with Trump on a number of security and economic issues.
In some cases, raising U.S. tariffs to match those of other countries would make little economic sense, according to William Reinsch, a trade expert at the Center for Strategic and International Studies.
To protect its domestic coffee growers, Kenya, for example, imposes a 25 percent tariff on coffee produced in other countries. The United States has no similar tariff.
But under the reciprocal approach, the United States would institute its own 25 percent tax to match Kenya’s, leaving U.S. importers facing higher costs, which would be “a supremely stupid thing to do,” Reinsch said.
By insisting on matching other nations’ tariff decisions, the reciprocal approach “basically hands our trade policy over to other countries,” he added.
The 14 countries that the United States has free trade agreements with – including Australia, Canada, Mexico, Israel and Jordan – should be the least affected by the new arrangement. Those deals generally eliminate most tariffs or set them at low levels.
White House officials said Trump had broad legal authority to impose the tariffs, including what’s known as Section 232, which allows for the adjustment of steel and aluminum impacts for national security. Authority also includes Section 301, which allows for imposing duties on foreign imports when the United States believes another country violates fair trade practices.