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Think carefully. My question is not as ridiculous as it sounds.

Reciprocal Tariffs

We will impose the same tariffs on other countries as they impose on the US: “No more, no less,” said Trump. “What they charge us, we charge them.”

Many people support such foolishness for one of two reasons. The first is they don’t think. The second is they believe any fool thing Trump says.

Think again about my question again. If you support reciprocal tariffs, then your answer is yes.

What Does “Reciprocal” Really Mean?

Curiously, despite Trump’s equality statements, no one really knows what reciprocal means, not even Trump.

Nonetheless, the White House says Trump Still Intends for Reciprocal Tariffs to Kick in on April 2.

“Unless the tariff and non-tariff barriers are equalized, or the U.S. has higher tariffs, the tariffs will go into effect,” the White House official said.

Bessent told Fox Business Network’s “Mornings with Maria” program that Trump on April 2 would give trading partner countries a reciprocal tariff number that reflects their own rates, non-tariff trade barriers, currency practice and other factors, but could negotiate to avoid a “tariff wall.”

“On April 2, each country will receive a number that we believe represents their tariffs,” Bessent said. “For some countries, it could be quite low, for some countries, it could be quite high.”

In short, the answer to what “reciprocal” means is: Who the F knows?

But we know reciprocal will be amazingly complex, difficult to administer, and change on the fly.

Trump Rules Out Simple Plan

The Wall Street Journal reports Trump Team Explored Simplified Plan for Reciprocal Tariffs

Officials have recently weighed whether to simplify the complex task of devising new tariff rates for hundreds of U.S. trading partners by instead sorting nations into one of three tariff tiers, according to people close to the policy discussions, who emphasized that the situation remains fluid and could evolve in the coming weeks. The proposal was later ruled out, said an administration official close to the talks, adding that Trump’s team is still trying to sort how to implement an individualized rate for each nation.

“The president has made it clear he wants to see true reciprocity across the board from every one of our trading partners, and many ideas have been discussed on how to best achieve that outcome,” White House press secretary Karoline Leavitt said. “As promised, President Trump will announce his reciprocal trade plan directly to the American people, and the world, on April 2nd.”

Officials are weighing how to move forward without overwhelming the U.S. Trade Representative’s office, an agency of more than 200 people charged with devising the reciprocal tariff plan. The Wall Street Journal previously reported that imposing reciprocal tariffs unique to each trading partner’s duties and non-tariff barriers could take six months or more.

No matter what the administration settles on, officials expect they will take into account value-added taxes that many other nations charge on consumption within their boundaries.

Thus, Trump will let every nation on the planet set US tariff policy, based of course on Trump’s calculation of what their policy is.

For example, AI says that as of March 19, 2025, New Zealand generally does not have tariffs on U.S. wool under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a free trade agreement that includes New Zealand and the United States.

That’s great.

Q: Can I assume the US will not put a tariff on New Zealand wool?
A: Ha Ha. Reciprocal does not mean reciprocal, silly. It means whatever Trump says it means.

Q: For how long?
A: Good question. Perhaps a day, a week, a month, or hours. No one has any idea.

Q: How many items are we talking about?
A: Great question. The Harmonized Tariff Schedule of the U.S., which details individual rates on particular commodities, has about 13,000 line items. The U.S. trades with roughly 200 countries.

Q: Is Washington ready to impose and manage 2.6 million individual tariff rates?
A: You tell me.

‘Reciprocal’ Tariffs Make No Sense

Wall Street Journal writer Douglas A. Irwin discussed the previous two questions in ‘Reciprocal’ Tariffs Make No Sense

Reciprocal tariff systems lead to nonsensical policies. Consider: China exports rare-earth minerals that are essential for the production of many high-technology goods. The U.S. doesn’t export such goods to China. But if China were nonetheless to impose high tariffs on them, would the U.S. then be required to impose real prohibitive duties on mineral imports from China?

Behind the superficial appeal of reciprocal tariffs are two major fallacies. The first is that other countries are taking advantage of us in trade, and we know this because we have a trade deficit. But macroeconomic factors, such as the balance between domestic savings and investment and the flow of capital between countries, determine the trade balance—not tariffs. The U.S.-Mexico-Canada agreement, the Trump-negotiated successor agreement to Nafta, ensures that U.S. goods have duty-free access to Mexico and Canada, as we also provide them. That’s equal treatment, or pure reciprocity, but it doesn’t guarantee balanced trade. The U.S. runs trade surpluses with Australia, Brazil, the Netherlands, the U.K., Singapore and most of Central and South America. Is the U.S. exploiting those countries? Does our trade surplus justify their putting tariffs on our goods?

Another fallacy is that other countries’ value-added taxes constitute discrimination against the U.S. Most European countries tax imported goods because they also levy taxes on domestic producers. In the end, VATs are taxes on consumption and don’t discriminate against imports.

Reciprocal tariffs don’t make sense even using the mercantilist logic that pervades the Trump administration. A prolonged bout of inflation has made the American public sensitive about prices. The U.S. shouldn’t be imposing tariffs that will raise the cost of living for American consumers on all manner of goods and justify it on the illusory basis of fairness and reciprocity. If we truly want reciprocity—meaning zero tariffs on both sides—then the answer is to conclude free-trade agreements with willing partners. The U.S. could and should be negotiating such trade agreements with the European Union, Japan and other trading partners and allies. But the Trump administration is obsessed with mercantilism and trade balances.

Even worse, by threatening Canada, Mexico and Colombia (with which we have free-trade agreements) with stiff tariffs over nontrade issues, the Trump administration has undermined the value of such agreements. If they no longer constrain U.S. policy, they’re no longer credible.

The Trump administration thinks it’s using tariffs to beat up other countries. In reality, U.S. businesses and consumers will take the hit. Even Mr. Trump’s hero William McKinley said, “Commercial wars are unprofitable.” Sadly, it’s advice that the administration seems likely to ignore.

Mr. Irwin is an economics professor at Dartmouth College and author of “Clashing Over Commerce: A History of U.S. Trade Policy.”

Bonus Question

Q: Why should any country believe Trump will honor any agreement he signs?
A: There is no reason and there is no trust. Trump tore up his own “best trade deal ever” USMCA.

What Can Go Wrong?

Don’t worry. As noted, the trade department has more than 200 people charged with devising the reciprocal tariff plan on 200 nations and 13,000 items.

Here’s the beauty of it all. Whatever the team decides, Trump can rectify at a moment’s notice, based on exchange rates, VATs, non-trade barriers, drugs, and what side of the bed Trump gets up on.

Reciprocal means whatever Trump says it means whenever he says it.

So nothing can possibly go wrong.

Related Posts

March 4, 2025: A Global Trade War Has Started – Global Recession Will Follow

The most significant global trade war since Smoot-Hawley and the Great Depression is underway.

March 9, 2025: Cheese Was a “Key Achievement” of Trump’s USMCA Trade Agreement

Trump is complaining about Canada’s cheese tariffs. In 2018, he was bragging about cheese.

That post is a real hoot. Please give it a look.

March 16, 2025: Trump Wants a Weak Dollar But Needs a Strong One

Trump wants the Fed to cut interest rates to weaken the dollar and boost exports. But that’s not what helped him get elected.

For discussion of the small business hit, please see How One Small Business Owner Is Coping With Trump’s Tariffs

Fifty-four percent of small businesses polled said that tariffs would negatively affect their companies, while just 11 percent said they would benefit.

Please read the above post and multiply it by tens of thousands of small businesses.

Welcome to the global recession.

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