Trump orders formulating plan for restoring fairness in US trade ties

The ‘Fair and Reciprocal Plan’ will seek to correct longstanding imbalances in international trade and ensure fairness across the board, a White House fact sheet said.

Trump ordered federal agencies to investigate the harm to the United States from any non-reciprocal trade arrangements adopted by trading partners and suggest remedial measures for new reciprocal tariffs that could boost the country’s revenue.

“The United States is one of the most open economies in the world, yet our trading partners keep their markets closed to our exports. This lack of reciprocity is unfair and contributes to our large and persistent annual trade deficit,” the fact sheet said.

The fact sheet offered examples of trading partners of the United States not offering it reciprocal treatment. For example, The US average applied most favoured nation (MFN) tariff on agricultural goods is 5 per cent, whereas India’s average applied MFN tariff is 39 per cent.

According to World Bank data, in 2022, the US average tariff rate on imports from India was 3 per cent, while India’s average tariff rate on imports from the United States was 9.5 per cent.

“Closed markets abroad reduce U.S. exports and open markets at home result in significant imports, both of which undercut American competitiveness,” it noted.

“Reciprocal tariffs will bring back fairness and prosperity to the distorted international trade system and stop Americans from being taken advantage of,” it remarked.

“Gone are the days of America being taken advantage of: this plan will put the American worker first, improve our competitiveness in every area of industry, reduce our trade deficit, and bolster our economic and national security,” it added.

The official investigation will probe tariffs imposed on US products; unfair, discriminatory or extra-territorial taxes imposed by trading partners; costs to US businesses, workers and consumers arising from non-tariff barriers or measures and unfair or harmful acts, policies, or practices, including subsidies and burdensome regulatory requirements; policies and practices that cause exchange rates to deviate from their market value, wage suppression and other mercantilist policies that make US businesses and workers less competitive; and any other practice that imposes any unfair limitation on market access or any structural impediment to fair competition with the US economy.

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 US government and the impacts of any information collection requests on the public, and shall deliver an assessment to the president.

The Renewable Fuels Association, the American Iron and Steel Institute and the Small Business Administration have praised the president’s plan.

Commenting on Trump administration’s plan to impose reciprocal tariffs on all trading partners, David French, National Retail Federation’s executive vice president of government relations, said, “While we support the President’s efforts to reduce trade barriers and imbalances, this scale of undertaking is massive and will be extremely disruptive to our supply chains. It will likely result in higher prices for hardworking American families and will erode household spending power. We encourage the President to seek coordination and collaboration with our trading partners and bring stability to our supply chains and family budgets.”

ALCHEMPro News Desk (DS)