Former President Donald Trump Announces Global Mutual Tariff Policy, Analysis Reveals It Is Not Truly Mutual

On April 2, 2025, former U.S. President Donald Trump announced a global "reciprocal tariffs" policy at the White House, describing it as a move to achieve trade fairness. However, according to data from the WTO and analyses by economists, these tariffs do not truly adhere to the principle of reciprocity but are based on bilateral trade deficits, imposing tariffs on multiple countries that are higher than the rates those countries impose on the U.S. This policy has sparked criticism for deviating from traditional reciprocal trade principles and has been accused of being aimed at eliminating the U.S. trade deficit.

Core Content of the "Reciprocal Tariffs" Policy

On April 2nd, 2025, Trump announced a tariff policy consisting of two main parts:

A uniform 10% basic tariff on almost all imported goods from all countries;
Additional "reciprocal tariffs" on about 60 countries, with rates ranging from 11% to 50%, based on a government-formulated calculation formula grounded in bilateral trade deficits.

According to a report by "The Value Edge," this policy is implemented through an executive order and is seen by the Trump administration as a tool to "reshape the global trade order." The White House stated that these tariffs aim to "respond to the barriers faced by American exporters in foreign markets," including tariff and non-tariff barriers.

Controversy Over Calculation Formula and Methodology

Although the Trump administration claims these tariffs are "reciprocal," the actual calculation method is vastly different from traditional reciprocal trade principles. According to an analysis by "CSIS," these tariffs are calculated based on the U.S. bilateral goods trade deficit with a country divided by the total value of imports from that country. If there is no deficit, a default 10% rate is applied.

This method overlooks the actual tariff levels and non-tariff barriers imposed by other countries on U.S. goods. Economist Doug Irwin pointed out: 'This is not about measuring the other party's trade barriers, but simply inferring whether the other party is "unfair" based on the trade deficit.'

Discrepancies Revealed by WTO Data

Data from the World Trade Organization shows that the "reciprocal tariffs" imposed by the U.S. on many countries are much higher than the rates these countries impose on U.S. goods. For example:

On China: The U.S. currently imposes an average tariff of 75% on Chinese goods, while China imposes an average rate of 56% on U.S. goods;
On Vietnam: The U.S. imposes a 46% tariff, while Vietnam's average tariff on U.S. goods is only 5.1%.

Even if Vietnam voluntarily proposed to eliminate all tariffs on U.S. goods, Trump's trade advisor Peter Navarro still stated it was "not enough," citing the existence of "non-tariff cheating," such as Chinese goods being re-exported through Vietnam and the VAT system.

Criticism from Experts and Academic Reactions

Many economists have harshly criticized this policy. Mary Lovely, an economist at the Brookings Institution, noted: "This is not reciprocity at all, but a misleading statement." She emphasized that the calculation method used by the Trump administration is "technically unfounded."

Former Biden administration Treasury official and University of Chicago professor Brent Neiman further stated that the Trump administration cited his 2021 research as a basis for tariff calculations but "completely misunderstood the research content," resulting in tariffs being four times higher than they should be. He wrote in "The New York Times": "They got it wrong, terribly wrong."

Contrast with Traditional Reciprocal Trade Principles

Traditional reciprocal trade principles, especially under the World Trade Organization (WTO) and multilateral trade agreements, emphasize "equal treatment" and the "non-discrimination principle." This means that if a country lowers tariffs for one country, it should offer the same treatment to all WTO member countries (the most-favored-nation treatment).

However, Trump's "reciprocal tariffs" policy takes unilateral action, setting punitive tariffs based on the U.S. trade deficit with individual countries, ignoring the actual tariff and non-tariff policies of the other party. This approach not only violates the multilateralism spirit of the WTO but also runs counter to the free trade policies promoted by the U.S. since the 1940s.

The Real Motive Behind the Policy

Although Trump publicly emphasizes "fairness" and "equity," many observers point out that the real purpose of this policy is to eliminate the U.S. trade deficit. Bill Reinsch, a senior advisor at the Center for Strategic and International Studies (CSIS), stated: "The Trump administration only cares about one thing: the bilateral trade deficit. They believe this indicates the other party is cheating."

Doug Irwin also noted: "This is not about revenue, equality, or true reciprocity, but about Trump's long-standing aversion to trade deficits. He has consistently opposed trade deficits for 40 years."

International Reactions and Potential Negotiations

Although the Trump administration claims these tariffs are "non-negotiable," many countries have actually begun seeking negotiations with the U.S. For example, the European Union has proposed imposing a 25% retaliatory tariff on U.S. goods, while Vietnam has voluntarily proposed eliminating tariffs on U.S. goods.

However, Trump's advisor Navarro stated in an interview with CNBC: "This is not a negotiation." This tough stance contrasts with the "open to negotiation" position expressed by other Trump administration officials, such as Treasury Secretary Scott Bessent, indicating potential divisions within the Trump administration regarding policy implementation.

Former President Donald Trump Announces Global Mutual Tariff Policy, Analysis Reveals It Is Not Truly Mutual

Key Updates

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