The TACO Reason

The goal to address dependency on foreign imports is a important and justified one.

The problem with this approach can be summarised by one quote from Daleep Singh, the one of the primary architects of the sanctions package that the US implemented on Russia after Russia invaded Ukraine in 2022:

We would be decoupling from what matter least, without derisking on what matter most

This tectonic shift from Washington signalled a drastic change in how the Trump administration would manage the world order. The "reciprocal tariff" announced on the so-called "Liberation Day" risked destabilizing markets and eroding global confidence in U.S. leadership, rather than fostering cooperation like other post-war administrations have.

Moreover, the tariff rate calculations underpinning this policy have been criticized for relying on an oversimplified formula - essentially equating the ratio the trade balance to imports and divide it by 2:

$$\text{"Reciprocal tariff"} = -\frac{1}{2} \times \frac{\text{Exports} - \text{Imports}}{\text{Imports}}$$