Office of United States Trade Representative submitted the 2025 National Trade Estimate

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On March 31, 2025 the Office of the United States Trade Representative (USTR) submitted the 2025 National Trade Estimate (NTE) to President Trump and Congress. The NTE is an annual report detailing foreign trade barriers faced by U.S. exporters and USTR’s efforts to reduce those barriers. …The findings of the 2025 NTE underscore President Trump’s America First Trade Policy and the President’s 2025 Trade Policy Agenda.

Reciprocal tariffs are calculated as the tariff rate necessary to balance bilateral trade deficits between the U.S. and each of our trading partners. This calculation assumes that persistent trade deficits are due to a combination of tariff and non-tariff factors that prevent trade from balancing. Tariffs work through direct reductions of imports. Reciprocal tariff rates range from 0 percent to 99 percent, with unweighted and import-weighted averages of 20 percent and 41 percent. To conceptualize reciprocal tariffs, the tariff rates that would drive bilateral trade deficits to zero were computed. While models of international trade generally assume that trade will balance itself over time, the United States has run persistent current account deficits for five decades, indicating that the core premise of most trade models is incorrect. The failure of trade deficits to balance has many causes, with tariff and non-tariff economic fundamentals as major contributors. Regulatory barriers to American products, environmental reviews, differences in consumption tax rates, compliance hurdles and costs, currency manipulation and undervaluation all serve to deter American goods and keep trade balances distorted. As a result, U.S. consumer demand has been siphoned out of the U.S. economy into the global economy, leading to the closure of more than 90,000 American factories since 1997, and a decline in our manufacturing workforce of more than 6.6 million jobs, more than a third from its peak. While individually computing the trade deficit effects of tens of thousands of tariff, regulatory, tax and other policies in each country is complex, if not impossible, their combined effects can be proxied by computing the tariff level consistent with driving bilateral trade deficits to zero. If trade deficits are persistent because of tariff and non-tariff policies and fundamentals, then the tariff rate consistent with offsetting these policies and fundamentals is reciprocal and fair.

• See also Paul Krugman – Will Malignant Stupidity Kill the World Economy? Trump’s tariffs are a disaster. His policy process is worse.
• See also Politico EU – Trump’s tariff math is crazy, says ‘Wisdom of Crowds’ author. James Surowiecki challenges the White House’s rationale for punishing Europe, China, India and Japan with reciprocal tariffs.
• See also Washington Post Live Updates – unpaywalled – “Markets, economists and lawmakers react to Trump’s sweeping new tariffs. Trump’s speech announcing a huge increase in tariffs on American trading partners was riddled with falsehoods and misleading statements on trade that he has made for years. But now they are determining policy that will increase the costs of goods for many Americans.”
• See also Bloomberg – “From friend, to foe, Donald Trump’s latest trade salvo impacts just about everyone. Although Canada and Mexico, early targets in the trade war, dodged the new levies. While you were sleeping, a 25% tariff on US auto imports that’s expected to increase costs and upend industry supply chains went into effect. Here’s a helpful list of reciprocal tariffs by country announced by the president yesterday. Reaction was swift. The European Union vowed to retaliate, while China branded the levies a danger to both global supply chains and economic growth. As for Treasury Secretary Scott Bessent, he offered this piece of advice to America’s trading partners: “ As long as you don’t retaliate, this is the high end of the number.” Meanwhile, the suite of tariffs puts the Federal Reserve in a tough spot as it contends with growth and inflation. Global financial markets reacted big time as well, while US futures plunged on concerns a full-blown trade war may send the US economy into a recession. Haven assets jumped with gold, again, hitting a record. As this all plays out, here’s what strategists and investors have to say about the trade measures.”