President Trump Announces “Fair and Reciprocal Plan” to Address U.S. Trade Relationships and to Counter Non-Reciprocal Trade with Other Countries

In a February 13, 2025 Memorandum, President Donald Trump instructed the Secretary of Commerce and the U.S. Trade Representative, with input from other agencies, to initiate “all necessary actions to investigate the harm to the United States from any non-reciprocal trade arrangements adopted by any trading partners.” Upon completion of this investigation, the president will receive a report “detailing proposed remedies in pursuit of reciprocal trade relations with each trading partner.”

According to the Memorandum, it “is the policy of the United States to reduce our large and persistent annual trade deficit in goods and to address other unfair and unbalanced aspects of our trade with foreign trading partners.” In doing so, President Trump plans to introduce the “Fair and Reciprocal Plan” to counter non-reciprocal arrangements with trading partners “by determining the equivalent of a reciprocal tariff with respect to each foreign trading partner.” Such an approach will be comprehensive in scope, examining non-reciprocal trade relationships with all U.S. trading partners, including: 

1. tariffs imposed on U.S. products; 
2. unfair, discriminatory, or extraterritorial taxes imposed by our trading partners on U.S. businesses, workers, and consumers, including a value-added tax; 
3. costs to U.S. businesses, workers, and consumers arising from nontariff barriers or measures and unfair or harmful acts, policies, or practices, including subsidies, and burdensome regulatory requirements on U.S. businesses operating in other countries; 
4. policies and practices that cause exchange rates to deviate from their market value to the detriment of Americans; wage suppression; and other mercantilist policies that make U.S. businesses and workers less competitive; and
5. any other practice that, in the judgment of the U.S. Trade Representative, imposes any unfair limitation on market access or any structural impediment to fair competition with the market economy of the United States. 

The White House provided a Fact Sheet with additional information on this plan.

Background information on President Trump’s concerns over bilateral trade-in-goods deficits is detailed in a May 2019 report issued during the first Trump administration, “The United States Reciprocal Trade Act: Estimated Job & Trade Deficit Effects,” from the White House Office of Trade and Manufacturing Policy, led by Peter Navarro. This earlier report identifies 467,015 tariff lines where the “foreign partner” applies a higher tariff than the United States, 141,736 tariff lines where the United States applies a higher tariff, and 87,319 tariff lines that are reciprocal. According to the analysis, India, China, Vietnam, the European Union, Thailand and Taiwan are the countries with the largest number of tariff lines higher than the United States.