President Trump’s favored catchphrase when speaking about trade policy is that it must be “free, fair, and reciprocal.” His penchant for such language has certainly been on display during his current trip to Asia, where in Japan alone Trump used some variation of it on at least three separate occasions.
Conducting a joint press conference with Prime Minister Abe, Trump professed a particular affinity for the reciprocal aspect of this formulation:
[F]rankly, I like reciprocal the best of the group. Because when you explain to somebody that you’re going to charge tariffs in order to equalize, or you’re going to do other things—some people that don’t get it, they don’t like to hear that. But when you say it’s going to be reciprocal—that we’re going to charge the same as they’re charging us—the people that don’t want a 5 percent or a 10 percent tariff say, oh, reciprocal is fair—and that could be 100 percent. So it’s much more understandable when you talk about reciprocal.
Trump also noted that this prized reciprocity does not exist in the U.S.-Japan trade relationship, telling a group of U.S. and Japanese business leaders that “We want free and reciprocal trade, but right now our trade with Japan is not free and it’s not reciprocal.”
On the surface, Trump’s comments may appear to be commonsensical and correct. Indeed, ideal tariff levels between two countries are a reciprocal zero. It is also accurate that the United States and Japan do not enjoy reciprocal trade in the context of tariffs. A deeper examination of the subject, however, reveals that the president gets more wrong than he gets right.
Let’s first note that while President Trump often frames the reciprocity argument as one in which the United States is the aggrieved party charging lower tariffs while its trading partners opt for higher ones, the opposite is also frequently the case.