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Review of Non-Reciprocal Trade Arrangements Should Include Macroeconomic Factors

 

TO: Office of the United States Trade Representative

FROM: National Taxpayers Union

RE: Comments to Assist in Reviewing Unfair Trade Practices and Non-Reciprocal Trade Arrangements

DATE: March 11, 2025 

DOCKET ID: USTR-2025-0001 

President Donald Trump’s America First Trade Policy Presidential Memorandum calls for a review of unfair trade practices by other countries. His Presidential Memorandum on Reciprocal Trade and Tariffs calls for an investigation of the harm caused to the United States by any non-reciprocal trade arrangements adopted by our trading partners. I appreciate the opportunity to submit these comments regarding those actions on behalf of National Taxpayers Union (NTU), a nonpartisan citizen group founded in 1969 to work for less burdensome taxes, more efficient, accountable government, and stronger rights for all taxpayers. More about our work as a non-profit grassroots organization is available at www.ntu.org

NTU encourages the agencies conducting these investigations to consider unfair or nonreciprocal policies, measures, or barriers imposed by foreign governments along with measures imposed by the U.S. government. Specifically, NTU submits the following three recommendations:

  1. In response to questions about trade deficits, NTU encourages you to report on the impact of macroeconomic factors on trade balances. For example, in 2023, foreign investors purchased $611 billion in U.S. Treasury securities. Everything else being equal, a reduction in foreign purchases of Treasuries by $611 billion accompanied by a corresponding increase in foreign purchases of U.S. exports would have reduced the U.S. goods trade deficit by 57%. This indicates that, if trade deficits are a concern, reducing federal borrowing is a worthy trade policy goal. In addition, the desire of U.S. trading partners to participate in our success by investing in our economy also affects trade balances. Addressing the impact of such macroeconomic factors would greatly increase the value of this investigation. 
  2. Establish a mechanism to provide an apples-to-apples comparison between U.S. and foreign tariffs and other trade barriers. The World Bank, the World Trade Organization, and other institutions provide data on average tariff rates, but these statistics often are not comprehensive, and are of limited value in comparing bilateral rates. The federal government should develop a methodology to accurately analyze the average tariff foreign countries apply to U.S. exports. These rates could be included in USTR’s annual National Trade Estimate Report on Foreign Trade Barriers, which catalogs specific foreign barriers. 
  3. Direct the U.S. International Trade Commission (USITC) to resume production of its annual report on the economic impact of significant U.S. import restraints that harm American workers, manufacturers, farmers, ranchers, entrepreneurs, and businesses. Consider the U.S. sugar program. Last month, U.S. refined sugar prices were 75% higher than world prices, harming consumers and food manufacturers that use sugar as an input. The Government Accountability Office cites studies showing that the program imposes net costs on the U.S. economy of $1 billion a year. This is just one example of how U.S. barriers affect the economy. Americans would benefit from an ongoing, comprehensive overview of the economic impact of similar restraints. With respect to your investigations regarding reciprocal trade, this analysis would also provide an opportunity to identify U.S. barriers that could be reduced to secure reciprocal reductions in foreign barriers.

Thank you for the opportunity to provide these suggestions, and let us know if there is anything else we can do to help with your investigations.