The United States Reciprocal Trade Act aims to address perceived imbalances in international trade by granting the President new authority to respond to non-reciprocal trade practices. Congress finds that while the U.S. maintains an open market, many trading partners impose significantly higher tariffs and nontariff barriers on American goods, disadvantaging U.S. producers and contributing to trade deficits. The bill asserts that the President needs broad tools, including the ability to levy reciprocal tariffs, to encourage fair trade and protect American economic interests.

Under this Act, the President may take action if a foreign country imposes significantly higher tariffs or more burdensome nontariff barriers on U.S. goods compared to what the U.S. applies. Authorized actions include negotiating agreements to reduce these barriers or imposing reciprocal duties on imports from that country. These reciprocal duties would be set equal to the foreign country's tariff rate or the effective rate of its nontariff barriers.

When taking such actions, the President must consider various factors, including tariff classifications, duty rates, physical characteristics of goods, and the trade-distorting impact of foreign barriers. The United States Trade Representative, in consultation with other agencies, will advise on determining the effective duty rate of nontariff barriers. The President retains flexibility to impose lower or higher reciprocal rates as deemed necessary or appropriate, and must terminate increased duties if the foreign country rectifies its practices or if continued imposition is not in the U.S. economic interest.

The bill includes provisions for congressional oversight, requiring notice and consultation with relevant committees before taking action. Any presidential imposition of reciprocal duties is subject to congressional disapproval through a joint resolution, which requires a two-thirds affirmative vote in both chambers. The President's authority to impose new duties under this Act is set to expire after three years but can be extended for an additional three years unless Congress passes a disapproval resolution. The Act defines a nontariff barrier broadly to include various government-imposed measures that restrict trade.