America Gets Even: Trump Launches ‘Reciprocal Tariffs’

Richard Nixon ended the Gold Standard, Bill Clinton ratified NAFTA, and Donald Trump – no less ambitious in his aims – today announced a series of sweeping retaliatory tariffs designed to reorder the global trade system established in the wake of the Second World War.

The tariffs and the issue they address

The president began with a picture of American carnage in the Rose Garden and repeated the theme of his decade in politics. He said that the country had been “looted, pillaged, raped, and plundered” by trading partners, both adversaries and allies alike. “Taxpayers have been ripped off for more than 50 years,” he told a crowd at the White House that included members of his Cabinet and union members in hard hats. “But it is not going to happen anymore.”

Then the color-coded chart, a bet that tariffs will deliver, and ultimately, the legacy of his second term.

The Trump administration will impose a 10% tariff across the board on all imports, but even higher individual rates for those nations that his administration deems particularly unfair in their trade practices toward the United States. He had promised previously that reciprocal was a literal term. “Whatever they charge us,” Trump said in February of the coming trade policy, “we will charge them.” Before the event, a senior White House official explained the new arithmetic, telling reporters, “Because the president is lenient and kind to the world, we’re only charging half.”

Trump unveiled the new rates, calculated not just from the tariffs other nations have imposed on U.S. goods but also currency manipulation and other trade barriers, on the blue, white, and yellow chart that sent stock market futures on Wall Street tumbling.

No solace

No one, not adversaries or even allies, was spared. Because China imposed tariffs of 67%, the U.S. will impose a “discounted reciprocal tariff” of 34%, according to the new schedule that the president held aloft. Similarly, given that the European Union imposes 39%, his administration will impose a tariff of 20%. The administration released the full list as Trump signed the executive order under the 1977 International Emergency Economic Powers Act.

“Chronic trade deficits are no longer merely an economic problem,” Trump said. “They are a national emergency that threatens our security and our very way of life.” As far as the individual rates are concerned, he added, “it is stunning how high the number has to be to stop the cheating.”

Economists are generally of the opinion that tariffs effectively amount to a tax, as producers pass those costs along to consumers. “Trump’s tariffs will result in higher prices and fewer goods available for sale in the U.S. The higher and more widespread the tariffs, the bigger the reduction in goods and the larger the price increases,” said Norbert Michel of the CATO Institute, forecasting possible inflation, a problem he said there was “very little the Fed can do about.”

This was generally the view of trade policy from the administrations of George H.W. Bush through Barack Obama. But Trump has rejected that orthodoxy and opted to go with his gut belief instead.

Trump sounded this alarm – and warning – back in the days of video tape.

While the trade policy was sweeping, the details should not have been shocking to anyone who listened and took seriously the promises Trump has made, not just since entering politics but throughout his entire career. “They come over here, they sell their cars, their VCRs, they knock the hell out of our companies,” a much younger Trump said of the trade deficits the U.S. was then running with Kuwait and Japan during a 1988 appearance on the Oprah Winfrey program. “They are beating the hell out of our country.” The White House resurfaced and shared that clip Wednesday. “President Trump had been calling this out for decades,” Vice President J.D. Vance wrote on X.

President Trump had been calling this out for decades. https://t.co/WEF5znhdvI— JD Vance (@JDVance) April 2, 2025

The Republicans now in the White House are very different from past GOP leaders who were much more friendly to Wall Street. Treasury Secretary Scott Bessent made headlines when he told investors that “access to cheap goods is not the essence of the American Dream,” as did Commerce Secretary Howard Lutnick when he said that the increase or decrease of the stock market by “a half percent on any given day is not the driving force of our outcomes.” Instead, the focus is on the “blossoming” of American industry.

Though a vibe shift, the sentiment is not entirely alien on the right. Trump is the first to impose protectionist policies at such a scale, but his allies insist he is drawing from a well dug by others.

Pat Buchanan called for tariffs in his day

“To me, the country comes before the economy; and the economy exists for the people. I believe in free markets, but I do not worship them. In the proper hierarchy of things, it is the market that must be harnessed to work for man – and not the other way around,” Pat Buchanan, right-wing pundit, former presidential aide and former presidential candidate, wrote in 1998.

Pat Buchanan on trade, 1998:

"To me, the country comes before the economy; and the economy exists for the people." https://t.co/m8tEN2PQ9l pic.twitter.com/JGGsbSWBLN— Nate Hochman (@njhochman) April 2, 2025

Sen. Eric Schmitt could have easily been quoting Buchanan Wednesday when the Missouri Republican and close Trump ally said, “America is not an economic zone. It’s not a strip mall with an airport attached. It’s a nation. It’s a people. It’s our home.”

America is not an economic zone.

It's not a strip mall with an airport attached.

It's a nation. It's a people. It's our home.

For too long, our leaders have been selling our country off for parts.

Today, President Trump put America First. Here's why. — Eric Schmitt (@Eric_Schmitt) April 2, 2025

Trump has been making that kind of argument for some time, and the president will get points for consistency from supporters. The question is whether his trade policies can deliver the roaring economy he promised on the campaign trail. Before the announcement, a White House official described the reciprocal rates as “a golden rule for the new golden age.” Wall Street may interpret it as a recipe for a recession.

Every prediction has failed

Analysts at Goldman Sachs increased the chance for a downturn from 20% in their previous forecast to more than a third, 35%, ahead of the announcement, citing the effect tariffs have on consumer spending and financial markets. Trump said the naysayers were not to be trusted: “They were wrong about NAFTA. They were wrong about China. They were wrong about the Trans-Pacific Partnership.” In fact, “every prediction about trade for the last 30 years” made by a cabal of unnamed “globalist” critics, he insisted, “has been proven wrong.”

The president vowed that the new trade policy would bring jobs back, making “America wealthy again,” and the White House had hyped the event as “Liberation Day,” inviting dignitaries that included blue-collar workers and members of Congress.

A significant change

It is, without a doubt, the most significant change to trade policy in decades, if not more. Whether America craters to recession or rises to the advertised golden age, the tariffs will be his legacy. Other than an auto worker from Detroit, the president stood alone on stage at the White House.

“This will be a very big moment,” the president predicted. “I think you’re going to remember today. It’s going to be a free nation that we’re dealing with. We’re going to have a very free and beautiful nation. It’s going to be Liberation Day in America, and it’s going to be a day that, hopefully, you’re going to look back in years to come, and you’re going to say, you know, he was right.”

This article was originally published by RealClearPolitics and made available via RealClearWire.