The 'Liberation Day' Tariffs Aren't Reciprocal and Other Reasons They Don't Make Sense

Cato Daily Podcast

Caleb Brown

Politics, News Commentary, 424708, Libertarian, Markets, Cato, News, Immigration, Peace, Policy, Government, Defense

4.6 • 949 Ratings

🗓️ 8 April 2025

⏱️ 15 minutes

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Summary

There are several errors, misconceptions, and confusing assumptions that went into the creation of Donald Trump's new wealth-destroying tariff regime. Scott Lincicome explains a few of them.

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Transcript

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0:00.0	This is the Cato Daily podcast for Tuesday, April 8th, 2025. I'm Caleb Brown. The president's new tariffs aren't reciprocal. They exist by executive fiat without public or congressional input. They apply to countries where the U.S. has trade surpluses. And it's hard to believe the U.S. will follow
0:21.1	through on any new cuts in tariffs, given the whipsawing back and forth of tariff rates that
0:26.4	the president has imposed already. And that's not all. Scott Linscombe explains.
0:36.1	The tariffs that Donald Trump has imposed with dubious legal grounding, where did those numbers come from?
0:47.2	I've looked them over and then compared them to actual tariff rates, average tariff rates that are charged by various countries,
0:56.1	and they doesn't seem to be any relationship between them.
1:01.0	No, no. In fact, we did a blog post on Thursday or Friday, hitting, showing the difference
1:07.3	between the rates that the president announced and the average tariff rates
1:12.4	that these countries are actually applying. And it's just a massive, massive discrepancy.
1:16.9	And look, there are three, I think, huge flaws in this so-called reciprocal process.
1:25.2	The first is it's not reciprocal at all. The reality is that, as I
1:31.8	wrote months ago now, to do a truly reciprocal tariff regime would require a massive amount
1:41.2	of work, investigation, and analysis. You have to look at not just tariff
1:47.2	barriers, but non-tariff barriers. You have to look at product-specific subsidies and
1:53.7	other things. You have to then convert all of that into some sort of tariff equivalent,
1:59.8	and then you have to look at U.S.
2:03.2	barriers as well and then equalize everything, right? So if you tried to do this,
2:09.7	given how long it takes to investigate just a simple subsidy program at the Commerce Department,
2:14.1	I mean, you're talking a long, long time. So they didn't do any of that.
2:18.8	Instead, all they did was look at a nation's bilateral trade deficit or surplus with the United
2:26.4	States. They divided that over its exports to the United States. Boom, that gave them a
2:32.6	percentage. They then, for some unknown reason, cut that
	...

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