While critics argue that reciprocal tariffs would destabilize global trade, Trump’s approach has its defenders. Supporters contend that the U.S. has long been at a disadvantage in international trade, and that a more aggressive tariff policy could force foreign governments to lower their own barriers—creating a fairer playing field for American businesses.
The Asymmetry Problem
One of Trump’s key arguments is that the U.S. applies lower tariffs than many of its trading partners. In 2023, America’s average applied tariff was 3.3%, compared to 5% in the EU and 3.8% in the UK. Meanwhile, developing economies tend to impose even higher tariffs to protect domestic industries. This creates a system where American goods face more barriers abroad than foreign goods do in the U.S., putting American companies at a disadvantage.
Under the MFN system, the U.S. cannot selectively raise tariffs against countries that impose higher duties on American exports. Reciprocal tariffs, however, would force countries to match the access they grant to U.S. companies—or face steeper tariffs on their own exports. Proponents argue that this strategy could incentivize foreign governments to lower their trade barriers, ultimately benefiting American producers.
Leveling the Playing Field on VAT and Non-Tariff Barriers
Trump’s plan also seeks to address non-tariff barriers, including VAT and regulatory restrictions. While many economists argue that VAT does not unfairly disadvantage U.S. goods, some businesses disagree. They point out that VAT refunds on exports act as an indirect subsidy, allowing foreign manufacturers to sell their goods at lower prices in global markets. If the U.S. imposed reciprocal tariffs to offset VAT effects, supporters believe it could pressure foreign governments to reassess their tax structures or offer U.S. exporters similar benefits.
Another issue is non-tariff barriers like food safety regulations, quotas, and data privacy laws. For example, the EU bans shellfish imports from 48 U.S. states due to environmental regulations, while China imposes strict labeling requirements on foreign products. The World Bank estimates that 94% of European imports face non-tariff barriers, compared to just 62% of imports to the U.S.. Supporters of Trump’s policy argue that retaliatory tariffs could serve as leverage to eliminate protectionist barriers that limit American exports.
A Negotiating Tool for New Trade Deals
Trump’s defenders argue that his real goal is not to raise tariffs indefinitely, but to use them as a bargaining chip. In his first term, he frequently threatened tariffs to gain trade concessions, most notably in renegotiating NAFTA into the USMCA (United States-Mexico-Canada Agreement).
A similar approach could be taken with China, the EU, and India, all of whom impose higher tariffs on U.S. goods than vice versa. India, for example, applies an average tariff of 17% on U.S. imports, compared to America’s 2.4% tariff on Indian goods. Supporters of Trump’s plan argue that reciprocal tariffs could force these countries into trade negotiations that ultimately lower trade barriers.
The Risks and Rewards
There’s no denying that Trump’s tariff policy comes with risks. A full-scale trade war could disrupt global supply chains and raise prices for consumers. However, supporters believe that short-term pain may be necessary for long-term gains. If foreign governments reduce their tariffs in response to U.S. pressure, American companies could benefit from greater market access, reduced trade imbalances, and stronger domestic manufacturing.
Trump’s argument is simple: if other countries refuse to lower their trade barriers, why should America keep playing by different rules? Whether this strategy succeeds will depend on whether trading partners choose to negotiate—or retaliate.