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 Richmans' Trade and Taxes Blog

Reciprocal Trade Act
Jesse Richman, 4/2/2019

Here is a press release from the Coalition for a Prosperous America concerning a new bill introduced in Congress.  The press release can be accessed at: https://www.prosperousamerica.org/cpa_endorses_reciprocal_trade_act_hr_764 

CPA Endorses Reciprocal Trade Act, HR. 764

Sees legislation as key to addressing trade barriers

Washington. The Coalition for a Prosperous America (CPA) has endorsed H.R. 764, the Reciprocal Trade Act (RTA) recently introduced by Rep. Sean Duffy (R-WI). The RTA would expand the president’s ability to defend domestic US manufacturers and agricultural producers against foreign protectionism by raising individual product tariffs to match foreign tariff and non-tariff barriers.

“We are pleased to support the efforts of Rep. Duffy and the Members of Congress who have co-sponsored this important legislation,” said CPA Chairman Dan DiMicco. “The Reciprocal Trade Act will provide much-needed leverage for President Trump as he confronts unfair trade. Congress should move swiftly to pass this bill.”

Currently, US tariffs are the lowest in the world despite high trade barriers in other countries. The RTA would provide the president with leverage to compel reductions in foreign trade barriers by increasing US tariffs.

The Reciprocal Trade Act specifies that, after appropriate consultations with Congress, the president can negotiate and enter into agreements committing foreign countries to lower their trade barriers. It also allows the president to impose reciprocal tariffs on countries that refuse to lower their tariffs and non-tariff barriers. 

“We’re very supportive of the Reciprocal Trade Act,” said Michael Stumo, CEO of the CPA. "The executive branch should have as much leverage as possible to act when other nations take advantage of America’s wide-open consumer market while restricting access to their own market. Every country wants to sell into the US market, and that gives us negotiating strength. In the past, the United States unilaterally reduced tariffs with the expectation that other countries would do the same. But they have not. This bill would provide a strong tool to motivate reciprocity.”

Reciprocity is a key principle in international trade, and critical to moving us towards a world of free and balanced trade.  Hopefully Representative Duffy's bill will gain traction.  Unfortunately that is unlikely in the current House, as all of the cosponsors of the legislation are members of the minority Republican Party.  

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