‘Reciprocal tariffs’ are economic madness
3 April 2025
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Responding to the announcement of new US tariffs, Kristian Niemietz, Editorial Director at the Institute of Economic Affairs said:
“Donald Trump’s new tariff schedule is a complete random mess. It demonstrates one thing quite clearly: any attempts to figure out what goes on in that man’s mind, and to influence it by responding with a tariff strategy of our own, are a waste of time.
“Trump’s economic folly is bad enough as it is. If other governments now respond with similarly foolish retaliatory measures, it would only compound Trump’s errors.
“It is American consumers who will bear the brunt of the cost of Trump’s measures. It would be British consumers who would bear the brunt of the cost of retaliatory measures from the British side.
“The only rational response to such an irrational policy is to ignore it, treat it as a write-off, keep calm and carry on.”
Responding to the announcements, Julian Jessop, Economics Fellow at the Institute of Economic Affairs, said:
“The Trump administration’s decision to impose additional tariffs on imports into the US is bad economics, motivated at least in part by bad politics.
“The new ‘reciprocal tariffs’ are based on the assumption that, in the absence of ‘currency manipulation’ and other artificial trade barriers, the trade in goods between two countries should always balance.
“This is just nonsense. Large and persistent bilateral deficits can simply result from the normal economic drivers of international trade, where each country specialises in whatever they do best.
“Moreover, the benefits from trade come at least as much from imports as from exports. The import of goods and services increases choice and competition, drives down prices, and can help to boost productivity.
“The UK should therefore continue to resist the siren calls to retaliate by imposing additional tariffs on imports from the US, which would simply raise costs for UK businesses and consumers.”
“Donald Trump’s new tariff schedule is a complete random mess. It demonstrates one thing quite clearly: any attempts to figure out what goes on in that man’s mind, and to influence it by responding with a tariff strategy of our own, are a waste of time.
“Trump’s economic folly is bad enough as it is. If other governments now respond with similarly foolish retaliatory measures, it would only compound Trump’s errors.
“It is American consumers who will bear the brunt of the cost of Trump’s measures. It would be British consumers who would bear the brunt of the cost of retaliatory measures from the British side.
“The only rational response to such an irrational policy is to ignore it, treat it as a write-off, keep calm and carry on.”
Responding to the announcements, Julian Jessop, Economics Fellow at the Institute of Economic Affairs, said:
“The Trump administration’s decision to impose additional tariffs on imports into the US is bad economics, motivated at least in part by bad politics.
“The new ‘reciprocal tariffs’ are based on the assumption that, in the absence of ‘currency manipulation’ and other artificial trade barriers, the trade in goods between two countries should always balance.
“This is just nonsense. Large and persistent bilateral deficits can simply result from the normal economic drivers of international trade, where each country specialises in whatever they do best.
“Moreover, the benefits from trade come at least as much from imports as from exports. The import of goods and services increases choice and competition, drives down prices, and can help to boost productivity.
“The UK should therefore continue to resist the siren calls to retaliate by imposing additional tariffs on imports from the US, which would simply raise costs for UK businesses and consumers.”
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