Tariff Update: President Trump Announces the “Fair and Reciprocal Plan”

In Mid-February, President Trump signed a Presidential Memorandum instructing the Secretary of Commerce and the US Trade Representative to work with the Secretaries of the Department of Homeland Security and Department of the Treasury to investigate the non-reciprocal trade practices of the United States’ trading partners, both “friend and foe.” Upon completion, they are to submit a report to President Trump with recommendations for addressing any trade imbalances with U.S. trade partners.

The investigation will include examining trade partners’ tariffs, value-added tax (VATs), regulatory requirements, policies affecting currency rates, and any practice constituting an unfair limitation on market access or any structural impediment to fair competition with the market economy of the United States. The Presidential Memorandum signals that the U.S. will likely take a broad view of what constitutes unfair trade practices.

Furthermore, the Presidential Memorandum directs the Director of the Office of Management and Budget to prepare a report detailing all “fiscal impacts” on the Federal Government within 180 days of the Presidential Memorandum. 

Much like the steel and aluminum tariffs announced earlier, the Fair and Reciprocal Plan is expected to significantly impact U.S. manufacturing companies that rely on global supply chains. There is a strong likelihood that any proposed tariffs could provoke retaliatory measures from affected trade partners. The White House has also expressed its willingness to engage in negotiations with trading partners to reach mutually beneficial economic agreements. Given the broad scope of the Fair and Reciprocal Plan, it is essential to stay informed about any trade deals or proposed tariffs that could impact U.S. trading relationships.