What are reciprocal tariffs, and why does Trump want to impose them on other countries?
A core element of the protectionist trade policies President Trump announced last week — an import tax blitz on long-standing global trade partners he referred to as "Liberation Day" — are so-called reciprocal tariffs.
The additive tariffs were unveiled alongside an across-the-board levy of 10% on dozens of nations and territories, from major exporters to the U.S. such as China to the British-controlled Falkland Islands, which has fewer than 4,000 residents.
"Reciprocal. That means they do it to us, and we do it to them," Mr. Trump said in the April 2 news conference, touting the tariffs as a way to boost domestic manufacturing and level the playing field with countries he said impose higher tariffs on U.S. imports than the U.S. charges for their products.
But economists note that that in addition to roiling global commerce and driving up costs for U.S. consumers and businesses, the tit-for-tat tariffs with key trading partners are hard to structure.
While the 10% baseline tariffs on all U.S. trading partners went into effect on April 5, the reciprocal levies are set to take effect at 12:01 a.m. on April 9.
Here's what to know about Mr. Trump's reciprocal tariffs.
What are reciprocal tariffs?
Truly reciprocal tariffs would impose the same tax on U.S. imports that other countries charge on American exports on a product-by-product basis. For example, if a country imposed a 6% levy on American-made shoes, Mr. Trump would tax that nation's footwear at the same rate.
Currently, the U.S. and its trading partners charge each other different levies on the same products. Germany, for instance, puts higher tariffs on vehicles made in the U.S. than what Washington, D.C., charges for German vehicle imports.
"Reciprocal means that if a country has higher tariffs than we do on certain products, we would raise it to that level," Alex Jacquez, chief of policy and advocacy at Groundwork Collaborative, a left-leaning public policy think tank, told CBS MoneyWatch.
But applying tariffs that match other countries' exactly would be an administratively complex task given the tens of thousands of codes that determine the tariff rates on a variety of products, noted Jacquez.
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"Setting up reciprocal tariffs across every product category with every trade partner would be completely infeasible with our administrative capacity," he said.
Other experts have suggested that Trump's goal behind the levies is less about driving companies to shift their production to the U.S., or generating federal revenue, than about pressuring other nations to strike trade deals with the Trump administration.
Are reciprocal tariffs the same as country-specific tariffs?
Rather than impose perfectly reciprocal tariffs across the board, the White House announced country-specific tariff rates calibrated to their trade imbalances with the U.S.
Mr. Trump on April said his administration would impose reciprocal tariffs at roughly half the rate of duties charged by other nations. In calculating the percentage of taxes charged by each nation on U.S. exports, the White House said it included not just levies, but all trade practices on a country-by-country basis that it deemed unfair, including currency manipulation, tariffs and other barriers. Mr. Trump characterized the discounted tariff rates as "kind."
For example, the U.S. said it would match China's 67% rate with a 34% tariff on Chinese exports to the U.S. China retaliated last week, saying it would impose its own 34% import fee on American products, to which Mr. Trump threatened an additional 50% tariff on Chinese imports. If Mr. Trump carries through with the threat, U.S. tariffs on imports from China would reach a combined 104%.
At 50%, Lesotho, an African nation, and French territories Saint Pierre and Miquelon face the highest country-specific tariff rates. Vietnam, where Apple produces some of its iPhones, is subject to a 46% tariff under Mr. Trump's plan.
Jacquez, who formerly worked as an economic policy analyst in the Biden administration, anticipated that the White House would "come up with a blended rate that is not reciprocal by product, but is reciprocal by saying their tariffs are 10% higher than ours on average, so we'll be imposing 10% tariff across-the-board on all goods."
As a result, the U.S. would tax some other nations' products at vastly different rate than they do ours, in a scenario Jacquez predicted would lead to retaliation against the U.S.
"It will hit a lot of products very differently in a proximate way, because it would be balanced by country but not by import or export," Jacquez said. "That is where complications will arise, and you could see a scenario in which countries retaliate against us."
Who are the "Dirty 15"?
Trump administration officials have singled out a group of nations they dubbed the "Dirty 15," a reference to the 15% of countries expected to be hit hardest by the new reciprocal tariffs given their trade surplus with the U.S.
Those nations account for "a huge amount of our trading volume," U.S. Treasury Secretary Scott Bessent told Fox News' Maria Bartiromo on March 18, without naming the trade partners. National Economic Council Director Kevin Hassett also told Fox News that the White House is targeting 10 to 15 nations with the biggest trade surplus with the U.S. Like Bessent, he also refrained from naming those nations.
Simon MacAdam, deputy chief global economist with Capital Economics, anticipated that likely targets would include leading U.S. trading partners such as China, the European Union and Vietnam. In 2024, the largest U.S. trade deficits around the globe — meaning countries from which the U.S. imports more than it exports — were with the following nations, according to federal data:
- China ($295.4 billion)
- European Union ($235.6 billion)
- Mexico ($171.8 billion)
- Vietnam ($123.5 billion)
- Ireland ($86.7 billion)
- Germany ($84.8 billion)
- Taiwan ($73.9 billion)
- Japan ($68.5 billion)
- South Korea ($66 billion)
- Canada ($63.3 billion)
- India ($45.7 billion)
- Thailand ($45.6 billion)
- Italy ($44 billion)
- Switzerland ($38.5 billion)
- Malaysia ($24.8 billion)
- Indonesia ($17.9 billion)
- France ($16.4 billion)
- Austria ($13.1 billion)
- Sweden ($9.8 billion)
Are reciprocal tariffs likely to drive up consumer prices?
While the levies have not yet gone into effect, experts say any reciprocal tariffs would mean added costs for U.S. businesses, which in turn would likely raise consumer prices as companies look to protect their profit margins.
"Tariffs are a tax on a business bringing a product into the country. When they receive it at a port of entry, whether it be an airport or seaport, they have to pay the duty to have it admitted into the country," Chris Barrett, a professor at Cornell SC Johnson School of Business, told CBS MoneyWatch. "You've just added a cost on for the business, and those costs get passed on, at least to some degree, to consumers."
Consumer costs are likely to rise more sharply for products for which there are no comparable substitutes.
"The more price-insensitive they are, the more likely they are to shoulder the burden of the tax," Barrett said.
Prices could also fall later on, if Mr. Trump lowers or removes reciprocal tariffs following trade negotiations, he noted.
