An economic perspective on the ‘reciprocal tariffs’

This article considers the economic foundation for the Trump administration’s 2025 Executive Order imposing ‘reciprocal tariffs’ under the International Emergency Economic Powers Act (IEEPA). The analysis in the Executive Order rests on numerous historical and economic fallacies, some rather subtle. They undermine each step in the logic of the Executive Order. An understanding of the errors in its logic exposes important flaws in contemporary discourse about US trade and thus has implications that extend well beyond the dispute over the President’s powers under IEEPA. We also address and critique the use of Section 122 of the 1974 Trade Act as a substitute for the IEEPA tariffs.