Tariff Reciprocity

‘Effective’ tariff index comparisons are spotlighted in media reports on trade wars and trade talks. Deficiency in the index used for comparisons misleads public opinion and policy makers. We offer an import volume equivalent uniform tariff index to replace the import-weighted average ‘effective’ tariff. Its share weights embody their general equilibrium dependence on all country and product tariffs. Reciprocal reductions in the indexes are: (i) consistent with the objective of reciprocal exchange of market access, and (ii) decompose into the product of buyer and seller incidences of tariffs that reflect domestic political economy objectives.