Trump Unveils “Fair and Reciprocal Plan” to Reform U.S. Trade Policies
The decision to impose reciprocal tariffs on international trade partners reflects an ongoing commitment to putting America first and readjusting global trade dynamics in favor of the United States.
On February 13, 2025, President Donald J. Trump signed a Presidential Memorandum to launch the “Fair and Reciprocal Plan” on foreign trade partners, with the aim of restoring fairness in U.S. trade relationships and addressing non-reciprocal trading practices.
According to a White House statement, this new strategy will seek to correct longstanding trade imbalances, prioritize American workers, improve industrial competitiveness, reduce the trade deficit, and strengthen economic and national security.
A 2019 report found that U.S. exporters face higher tariffs more than two-thirds of the time across 132 countries and over 600,000 product lines. This imbalance has led to the U.S. recording a goods trade deficit annually since 1975, which, in 2024 alone, surpassed $1 trillion.
Moreover, the agricultural sector experienced a $40 billion deficit in 2024 due to non-reciprocal barriers.
Beyond tariffs, American companies are subject to digital service taxes in countries like Canada and France, which individually collect over $500 million annually from U.S. firms. These non-reciprocal taxes cost American companies more than $2 billion annually.
The White House highlighted that the “Fair and Reciprocal Plan” mandates the development of corrective measures to “stop Americans from being taken advantage of” and ensure that U.S. trade relationships are fair “across the board.”
The United States, known for its open economy, has faced challenges with trading partners who maintain restrictive barriers against U.S. exports. This lack of reciprocity has significantly contributed to ongoing annual trade deficits.
One example is ethanol imports. The U.S. imposes a modest 2.5% tariff on ethanol imports, while Brazil levies an 18% tariff on American ethanol. This disparity resulted in the U.S. importing over $200 million worth of ethanol from Brazil in 2024 and Brazil exporting only $52 million in return.
Similarly, the U.S. applies an average Most Favored Nation (MFN) tariff of 5% on agricultural goods, whereas India enforces an average MFN tariff of 39%. India also imposes a 100% tariff on U.S. motorcycles, while the U.S. charges just 2.4% on Indian motorcycles.
In the automotive sector, the European Union maintains a 10% tariff on imported cars, compared to the U.S. rate of 2.5%.
Additionally, the EU permits unrestricted shellfish export to the U.S. but bans shellfish imports from 48 American states, despite a 2020 commitment to expedite approvals. This resulted in the U.S. importing $274 million in shellfish from the EU in 2023, while exporting only $38 million to European markets.
The “Fair and Reciprocal Plan” specifically targets such disparities and ensures that U.S. industries are no longer disadvantaged by unfair foreign tariffs and trade practices.
The “Fair and Reciprocal Plan” is not a standalone initiative.
It builds upon President Trump’s previous efforts, including replacing NAFTA with the U.S.-Mexico-Canada Agreement (USMCA) during his first term, imposing tariffs to protect national security interests in steel and aluminum industries, and taking actions against China’s intellectual property violations.
Recently, President Trump also used tariffs as leverage to prompt Canada and Mexico to implement necessary changes at the northern and southern borders to improve the safety and security of American citizens.
If you import goods into the U.S., please reach out to one of our trade professionals to discuss the potential impact of the new tariffs on your business.