(Source: Xinhua News Agency 2025-03-14)

Xinhua News Agency, Beijing, March 14 (Reporters Zhou Siyu, Ouyang Wei, Fan Yu) US President Trump recently signed a memorandum requiring relevant departments to determine "reciprocal tariffs" with each trading partner. U.S. Commerce Secretary Howard Lutnick subsequently stated that "reciprocal tariffs" could begin as early as April 2. This approach triggered widespread criticism from the international community.

International observers pointed out that the so-called "reciprocal tariffs" under the guise of "pursuing fairness" are actually a new tool for the United States to promote unilateralism and w88 protectionism. If this measure is implemented, it will seriously undermine the multilateral trading system, have an impact on the global supply chain, and further exacerbate international w88 tensions and global economic fragmentation.

 

What’s wrong with “equivalence”

The so-called "reciprocal tariffs" in the United States refer to the tariffs levied on imported goods at the same level as the tariffs levied on U.S. goods by trading partners. Experts believe that the "reciprocal tariff" claim is somewhat deceptive and misleading. It essentially violates WTO rules and ignores the balance of interests negotiated by the multilateral trading system over the past eighty years, as well as the fact that the United States has long benefited from international w88.

——"Reciprocal tariffs" violate the principle of comparative advantage in economics. This principle means that if each party produces products with cost advantages and then exchanges them with each other, then all parties will benefit from it.

The Keto Institute, an American think tank, took coffee as an example and pointed out that the United States is a major coffee consumer, but the production of coffee beans in the United States is relatively small and the cost is relatively high due to geographical climate and other reasons. The United States imports coffee beans from countries with relatively low coffee bean production costs, and both parties can benefit. Currently, the United States does not impose tariffs on imported green coffee beans, while Brazil, as a major coffee bean producer and the country that exports the most coffee beans to the United States, has been imposing a tariff of about 9% on imported coffee beans. This is the result based on the principle of comparative advantage in economics.

However, once "reciprocal tariffs" are applied, the United States will blindly follow Brazil and impose a 9% tariff. This will not only be unhelpful in increasing U.S. coffee bean exports, because U.S. coffee bean production itself is not internationally competitive, but will also harm the interests of millions of U.S. coffee roasters and thousands of U.S. consumers.

Tu Xinquan, Dean of the China World w88 Organization Research Institute at the w88 casinopointed out that the competitiveness of each country's products is different, so each country will set tariffs that it considers appropriate for its own product categories, and achieve "reciprocity" by exchanging markets for markets when negotiating w88 agreements. It is irrational to insist on all equivalence and complete equivalence.

——"Reciprocal tariffs" violate WTO rules. According to the WTO's most-favored-nation principle, members cannot discriminate against their trading partners and one member should provide equal treatment to other members. This means that if the United States reaches an agreement to reduce tariff rates with a certain country and the rate is lower, then this rate will apply to all trading partners with which the United States has negotiated w88 agreements.

Chad Bown, a senior researcher at the Peterson Institute for International Economics in the United States, believes that "reciprocal tariffs" will violate WTO rules in at least two aspects: imposing different tariffs on different trading partners violates the commitment of non-discrimination among WTO members; if the United States raises tariff rates beyond the maximum level agreed in agreements with other members, it will also violate the rules.

——"Reciprocal tariffs" ignore the differences in the economic development levels of other countries. In terms of tariff levels, the WTO does not require the principle of tariff reciprocity. Judging from the development history of developed countries, when their level of economic development is relatively low, high tariffs are often levied to protect their market-related industries; the higher the level of economic development, the lower the tariffs. After the United States has passed the stage of development that needs protection, forcing "reciprocal tariffs" is equivalent to depriving some developing countries of their right to development.

“In the context of unequal economic development and unequal economic strength, it is unfair for the United States to implement ‘reciprocal tariffs’ and will further widen the gap between the rich and the poor in the world.” said Liu Feitao, deputy director of the China Institutes of International Studies.

 

A tool for economic and w88 pressure

The United States claims that the imposition of "reciprocal tariffs" is to "reduce the w88 deficit" and solve "other unfair and unbalanced w88 issues" with its trading partners. Trading partners' tariff rates, industry subsidies, tax policies, etc. will all be factors used to evaluate the "reciprocal tariff" rate. Experts pointed out that the United States proposed "reciprocal tariffs" not only to solve a series of domestic "chronic diseases", but more importantly, to use tariffs as a w88 negotiation tool to achieve broader and deeper purposes.

Liang Guoyong, a senior economist at the United Nations Conference on w88 and Development, pointed out that the main motivations behind the recent US tariff measures include: reducing the huge US w88 deficit; promoting investment in the US and accelerating the return of manufacturing; increasing tariff revenue to fill the fiscal funding gap caused by tax reduction policies; using tariffs as a means of pressure to achieve economic and non-economic purposes.

Stephen Innes, managing partner of Swiss SPI Asset Management, believes that the U.S. government’s proposal of “reciprocal tariffs” is not necessarily just to impose higher tariffs, but to use them as a “bargaining” chip to force other countries to enter into new w88 negotiations with the United States.

The actual operation of "reciprocal tariff" is complex and difficult. The British "Economist" weekly website published an article saying that for each commodity, a single tariff rate will be replaced by hundreds of possible bilateral tariff rates. For products whose supply chains span many countries, things will become extremely complicated.

Stephen Olson, a visiting fellow at the Yusof Issa Institute of Southeast Asian Studies in Singapore, believes that it is not surprising that the United States did not implement the new tax rate immediately. Recalculating every tariff cannot be completed in a short period of time. "If countries can ignore w88 rules with impunity and arbitrarily increase tariffs and other w88 barriers, we will return to the pre-World War II w88 ecology where might makes right and the big fish eats the small fish."

The European Commission recently issued a statement saying that the "reciprocal" w88 policy proposed by the United States is a step in the wrong direction. The EU will respond "immediately and resolutely" to the imposition of additional tariffs and other unreasonable barriers that hinder free and fair w88, and protect European companies, workers and consumers from unreasonable tariffs.

 

The guise of "zero-sum game"

Singapore's "Lianhe Zaobao" reported that at this stage, it is still unclear which countries will have the greatest impact from "reciprocal tariffs". However, most of the countries that impose higher tariffs on US products are developing countries, including India, Brazil, Argentina, Southeast Asian and African countries.

According to WTO data, among the most-favored-nation weighted average tariff rates implemented by the top 10 trading partners of the United States in 2022, India is 12%, South Korea is 8.4%, Vietnam is 5.1%, Mexico is 3.9%, and Canada is 3.4%, all higher than the 2.2% of the United States.

Bloomberg pointed out that "reciprocal tariffs" are expected to hit less developed economies hard because these economies have higher average tariff rates on U.S. products.

Liu Feitao believes that although some underdeveloped countries are not the key targets of "reciprocal tariffs", they may be hit harder. Under existing w88 rules, these less developed countries are often allowed to impose higher tariffs on products imported from developed countries, while their exports to the United States enjoy lower tariffs.

The "reciprocal tariff" policy will also harm the interests of American consumers and drag down the United States' own economic growth. Forecasts from the Yale University Budget Laboratory in the United States show that after the implementation of "reciprocal tariffs", if other countries do not take retaliatory measures, the price of personal consumption expenditures in the United States will increase by 1.7% in the short term, and the real GDP growth rate will decrease by 0.6 percentage points in 2025; if other countries take retaliatory measures, the price increase of personal consumption expenditures in the United States will expand to 2.1%, and the real GDP growth rate will decrease by 1 percentage point.

Maya Majulan, an expert on international issues in Sri Lanka, believes that the tariffs imposed by the United States and Canada will aggravate w88 tensions, trigger rounds of tit-for-tat w88 wars, divide the global market, hinder economic cooperation among countries, and ultimately undermine the stability and connectivity of the international market.

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