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"Liberation Day" One Year On: Understanding the tariff formula [20.03.26]
This contribution to the series "IAW Impulse" was originally published in May 2025, shortly after U.S. President Donald Trump’s highly publicised “Liberation Day” announcement of “reciprocal” tariffs on U.S. imports on 2 April 2025. Although many of the proposed measures were soon suspended, U.S. tariff policy has remained central to international trade debates in the EU and Germany.On 2 April 2025, then U.S. President Donald Trump proclaimed a trade policy “Liberation Day” and announced the introduction of “reciprocal” tariffs on U.S. imports of goods. He justified this step by arguing that numerous trading partners had erected tariff and non‑tariff barriers that hindered U.S. exports. In this context, the Office of the United States Trade Representative (USTR) temporarily published a formula designed to determine the level of these tariffs and to give the policy a theoretically grounded, rules‑based appearance.Most of the initially announced measures were subsequently suspended, with the notable exception of steep import tariffs on goods from China. This pause created an opportunity to scrutinise the calculation logic underlying the proposed tariff setting.In my contribution to the series "IAW Impulse", published in May 2025 (in German), I analyze the USTR’s “reciprocal” tariff formula using numerical examples and evaluates its economic coherence and practical implications. I also discuss potential responses by Germany and the European Union and explores what lessons can be drawn for future EU trade policy in an environment shaped by persistent protectionist tendencies.
IAW-Impulse Nr. 8/2025: Die „reziproken“ Zölle der USA: Ein Blick hinter die Zollformel