Congress, Industry, Trading Partners React to Reciprocal Tariff Launch

South Korea's government told reporters that Korea has no tariffs on U.S. manufactured exports, and an average rate of 0.79% last year, but that it will evaluate its non-tariff barriers.

The top Democrat on the House Ways and Means Committee, Richard Neal of Massachusetts, said in a hallway interview at the Capitol that Canada's nearly-tariff-free trade with the U.S. won't necessarily mean that President Donald Trump will believe there's no reason to hike tariffs on its exports.

"Knowing where the president is coming from, he'll invent one," Neal said.

Neal added that if the EU and the U.S. had been able to conclude a free trade agreement years ago, those "established rules would go a long way toward making the relationship a lot better."

"Look, I think it is legitimate to question trade imbalances, that's an important consideration," Neal said. The trade deficit is the reason for the reciprocal tariff push. But Neal questioned using Section 232 or the International Emergency Economic Powers Act to hike tariffs. "But also, to use national security as this arbitrary determinant of what a tariff ought to look like, I don't think that's been carefully thought out."

Rep. Don Beyer, D-Va., who is one of two sponsors of a bill that would make it impossible for Trump to use IEEPA to hike tariffs, questioned the logic of saying that a trade deficit with Vietnam or Mexico is because they are ripping us off, or cheating in some way through wage suppression, currency manipulation or other discrimination.

"Our family income's way higher than the average Mexican [family]. We're also a very consumption-oriented economy, which is why we need countries where products can be made very inexpensively, to provide them to us," Beyer said. And, when asked if Vietnam has the capacity to buy as much from us as we do from them, he replied: "Not yet!"

"It is so ironic and weird that the Trump administration so far has focused on chipping off one thousandth of one percent of grants which sometimes may have been inappropriate, rather than focusing on bringing down the cost of living. I believe that's why he won, because the prices were too high. And he's moving in the wrong direction."

It is possible that the reciprocal tariff will lead to trading partners lowering tariffs -- the EU is thinking about dropping its 10% tariff on cars to 2.5%, to match the U.S. rate. But Beyer, who owns a car dealership that sells Kias, Mazdas, Volvos, Suburus, Volkswagens and Land Rovers, said he's not sure that would mean Europeans would start buying a lot more American-built cars.

According to the European Automobile Manufacturers Association, in 2022, the EU exported 738,436 vehicles to the U.S. while the U.S. exported 271,476 vehicles to the EU; the group's 2023 report didn't indicate a number of units from the U.S., but said that the U.S. exported 7.8 billion euros' worth of vehicles to the EU, while the EU exported 800,821 cars to the U.S., worth more than 40 billion euros.

"Having been in the car business for 46 years, so much of what people buy has to do with consumer preference rather than price," Beyer said.

Beyer said he doesn't think Republicans will challenge the president on his tariff policy -- at least not until it starts breaking through to American voters. He said voters could become angered over higher costs, Medicaid cuts planned to pay for tax cut extensions or immigration actions.

"The big picture is, when Trump's policies come home to roost, and his approval ratings start to fall, and his alleged mandate disappears, and then perhaps we'll see a little more political authenticity," he said. "I think there are so many ways he's going to upset the American people. Generally, people don't like change, and they definitely don't like chaos."

Republicans focused on the possibility of other countries lowering tariffs and non-tariff barriers, and thereby boosting U.S. exports -- or said that higher tariffs on imports would convince foreign firms to open more factories here.

Rep. Dusty Johnson, R-S.D., said in a hallway interview at the Capitol, "I think South Dakotans are excited about market access. We sell $7 billion worth of goods, both ag and manufactured, to the rest of the world. I do think there's a number of different markets that have been difficult for South Dakota to sell into.

"Tariffs are clearly a problem, but also non-tariff barriers. I think this administration is really focused on how to remove both of those problems.

"If you get European diplomats in a frank moment, they will acknowledge that a lot of these so-called science concerns are just good old-fashioned protectionism. They are using those science arguments to protect their producers. And I think we have a real opportunity to level-set our trade negotiations with the countries, and frankly, to call Europeans out on some of this baloney they've been peddling for far too long. Donald Trump gives us a real opportunity, frankly, to win those arguments."

The White House shared tweets and press releases from Republicans hailing the policy. Sen. Lindsey Graham, R-S.C., said, "Most countries charge us far more in tariffs than we charge them. Those days are over. I applaud President Trump’s decision to impose reciprocal tariffs against our trading partners. Whatever tariffs they put on American products, we will put on their products. This will be a game changer. Simple and brilliant."

House Ways and Means Chairman Rep. Jason Smith, R-Mo, argued that U.S. exporters are held back by other countries' "much higher tariffs and other barriers than the United States imposes on imports. We must look at every avenue -- including reciprocity -- to ensure that U.S. interests are treated fairly."

The same release from the White House quoted the Renewable Fuels Association, which complained that free trade in ethanol with Brazil turned to tariff rate quotas in 2017, and to a tariff in 2020, which is now 18%, which "has virtually eliminated all market access for U.S. ethanol producers. We thank President Trump for taking this action and hope this reciprocal tariff will help encourage a return to free and fair ethanol trade relationship with Brazil."