USTR Seeks Public Comment on Unfair and Non-Reciprocal Foreign Trade Practices

President Donald Trump issued a memorandum on reciprocal trade and tariffs on Feb. 13, 2025, outlining U.S. policy to reduce the persistent annual trade deficit and address inequitable and unbalanced trade practices with foreign partners. Though the memorandum does not explicitly define "non-reciprocal" trade arrangements, its alignment with the America First Trade Policy Memorandum issued on Jan. 20, 2025, suggests a broad interpretation – likely encompassing any trade arrangement that results in the U.S. importing more than it exports.

Significantly, this memorandum does not implement or propose the implementation of tariffs but requires the federal government to review existing arrangements for trade imbalances and determine the equivalent of a reciprocal tariff for each trading partner. This strongly aligns with the American First Trade Policy Memorandum, that directs agencies to review virtually all aspects of the U.S. trade policy by April 2025.¹

For a closer look at the administration's memo on reciprocal tariffs, see Holland & Knight's previous alert, "Overview of the Trump Administration's Memorandum on Reciprocal Trade and Tariffs," Feb. 20, 2025.

Comments Due Soon

As part of the investigation referenced in the memorandum on reciprocal trade and tariffs, the U.S. Trade Representative (USTR) is seeking comments on unfair trade or non-reciprocal foreign trade practices. The deadline for submitting comments is March 11, 2025.

This is the only public comment opportunity offered by USTR prior to April 1, 2025, which is the deadline for USTR's comprehensive review of U.S. trade policy and recommendations to the president, as specified in the America First Trade Policy Memorandum. USTR requested assistance in reviewing and identifying any unfair trade practices by other countries and in initiating all necessary actions to investigate the harm to the U.S. from any non-reciprocal trade arrangements.

Submitted comments are intended to assist USTR in recommending appropriate actions to remedy such practices and in reporting proposed remedies to the president in pursuit of reciprocal trade relations.

USTR requested that the comments be submitted on a country-by-country basis, particularly for Group of 20 (G20) countries and countries with the largest bilateral trade deficits in goods.

In addition, USTR requested that these comments outline the foreign country, trade arrangement, operation of the trade arrangement and U.S. impact. USTR further requests that the harm be quantified, ideally based on a dollar amount.

Analysis

The fact sheet accompanying the memorandum identifies specific countries and industries that the administration views as failing to provide the U.S. with reciprocal treatment. These explicit references may signal potential targets for future reciprocal tariff measures.

Below is a summary of the key areas highlighted:

• Brazil – Ethanol. The memorandum points to trade imbalances driven by non-reciprocal tariffs in Brazil, citing U.S. tariffs on ethanol at 2.5 percent while Brazil imposes 18 percent.
• India – Agriculture and Motorcycles. The memorandum cites tariff disparities disadvantaging U.S. exports to India, where the U.S. average applied most-favored-nation (MFN) tariff on agricultural goods is 5 percent but 39 percent in India. The memorandum also points to India's 100 percent tariff on U.S. motorcycles compared to the 2.4 percent U.S. tariff on Indian motorcycles.
• European Union – Shellfish. The memorandum highlights market access restrictions in the EU, where American shellfish imports are banned from 48 U.S. states, despite a 2020 commitment to open the market, resulting in a significant disparity in U.S. imports of EU shellfish ($274 million) vs. U.S. exports to the EU ($38 million).
• EU – Autos. The memorandum points to tariff asymmetries in the EU, where imported cars face a 10 percent tariff, while the U.S. imposes only 2.5 percent, creating an imbalance in auto trade.
• Canada and France – Digital Services Tax. The memorandum highlights unfair digital taxation in Canada and France, where American firms are taxed more than $500 million annually in each country, costing U.S. businesses more than $2 billion per year.
• Global – Higher Tariffs on U.S. Exports. The memorandum cites widespread tariff disadvantages for U.S. exporters, noting an unspecified 2019 study that found U.S. goods face higher tariffs more than two-thirds of the time across 132 countries and 600,000 product lines.

Why This Matters

President Trump's consistent push – a little over 40 days into his new administration – to impose or threaten tariffs is impacting current operations for many U.S. businesses. Among the key considerations for companies:

• This latest memorandum suggests that the Trump Administration is open to a more targeted approach, as opposed to an absolute or baseline tariff on all imports.
• The key areas highlighted above are product- and country-specific. This suggests that, while the potential scope of non-reciprocal trade arrangements is broad, the response by the U.S. will likely be product- and country-specific.
• This comment period represents the first opportunity for the public to directly comment on proposed tariffs under this administration. At present, tens of comments have been submitted.
• The majority of comments outline the potential harm of tariffs on U.S. businesses, specifically from tariffs on imports from China. Several comments identify harmful practices of foreign companies located in Mexico and India.
• Because USTR's investigation of non-reciprocal trade arrangements is tied to reports due in April, an extension of the March 11 deadline for comments is unlikely. President Trump and Commerce Secretary Howard Lutnick also recently indicated that reciprocal tariffs on imports from many nations could be announced as soon as April 2, 2025. These tariffs are separate from steel and aluminum tariffs that President Trump announced last month, which are set to take effect on March 12, 2025.
• The longer timeline – the Fair and Reciprocal Plan, as outlined above and in the memo, relies in part on reports due to the president in April 2025 and on comments submitted to USTR – may provide greater opportunities for input to the Trump Administration but also aligns with evolving views held by some that tariff revenue can offset government spending or tax cuts.

Holland & Knight is available to offer assistance in submitting comments. For more information or questions, please contact the authors or another member of Holland & Knight's International Trade Group.

Notes

¹ For an in-depth analysis of the American First Trade Policy, see Holland & Knight's previous alert, "An Overview of President Trump's Trade Policy to Date," Jan. 31, 2025.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.