From our Government Relations team at Kelley Drye

On February 13, 2025, President Trump signed an executive memorandum on “Reciprocal Trade and Tariffs” directing his economic team to create a “Fair and Reciprocal Plan” for imposing a supplemental tariff that will be designed to counteract a wide range of tariff, tax and non-tariff barriers that negatively affect U.S. producers selling into foreign markets.
As described in the memorandum, the United States designed and led the global trading system chiefly by lowering duties and other barriers to imports at a rate that outpaced its trading partners, causing it to become “one of the most open economies [with] the lowest average weighted tariff rates in the world,” with “fewer barriers to imports than other major world economies, including those with similar political and economic systems.”
This new executive action seeks to make U.S. trade “more reciprocal and balanced” to reduce the trade deficit, grow the U.S. economy, and improve U.S. trade relationships to benefit U.S. workers, manufacturers, farmers, ranchers, entrepreneurs and businesses.

Purpose and Scope
The Fair and Reciprocal Plan is intended to ensure “comprehensive fairness and balance across the international trading system,” and it is correspondingly ambitious in scope. It aims to capture all “measures that disadvantage the United States as applied, regardless of what they are called or whether they are written or unwritten.”
The President has directed his economic advisors (in a process led by the Secretary of Commerce and U.S. Trade Representative, but also the Secretaries of Treasury, Commerce, and Homeland Security, Assistant to the President for Economic Policy, Kevin Hassett, and Senior Counselor to the President for Trade and Manufacturing, Peter Navarro) to identify all:

• tariffs;
• unfair, discriminatory or extraterritorial taxes (including value-added tax, or VAT),
• costs arising from nontariff barriers;
• harmful acts, policies, or practices burdening U.S. businesses operating in other countries, including subsidies and burdensome regulatory reporting requirements;
• policies and practices “that cause exchange rates to deviate from their market value[ ] to the detriment of Americans,” and that cause “wage suppression” or that otherwise make U.S. businesses and workers less competitive; and
• any other unfair limitation on market access or structural impediment to fair competition with the United States.

Read the full advisory from Kelley Drye here.