(Source: Outlook Think Tank 2025-04-02)

The U.S. government is scheduled to impose "reciprocal tariffs" on trading partners starting from April 2.

The word "reciprocity" in English is reciprocal, which can be translated as "reciprocity" or "reciprocity". In the past w88 mechanism arrangements, the Chinese translation was mostly "reciprocity", reflecting the spirit of mutual benefit and win-win among trading "partners". However, in the context of the Trump administration's "tariff stick" in the United States, the Chinese translation of "reciprocity" can more objectively reflect and highlight the equal treatment between w88 "opponents."

The "reciprocal tariffs" promoted by the Trump administration, under the banner of the so-called "pursuit of fairness", apply "one size fits all" tariffs. In essence, they violate the basic principles of economics, violate the rules of the WTO, and ignore the differences in economic development between countries. They are a new tool to promote w88 protectionism based on "zero-sum game" thinking. This move is bound to seriously undermine the multilateral trading system, impact the global supply chain, and further aggravate international w88 tensions and global economic fragmentation.

1 How to be "equivalent"?

The "reciprocal tariffs" proposed by the US mainly include three levels.

——“Reciprocal tariff” at the national level

For example, if a country imposes a 100% import tariff on U.S. goods, the United States will also impose a 100% tariff on that country's goods.

——“Reciprocal tariff” at the commodity level

For example, the United States currently imposes a 2.5% tariff on a certain product from a certain country, but the other country imposes a 10% tariff on the same product from the United States. Once the "reciprocal tariff" is implemented, the United States will increase the tariff on such goods imported from this country to 10%.

——“Reciprocal tariffs” at the level of non-tariff barriers

This level is more complicated and involves value-added tax and other content.

On March 24, US President Trump attended an event at the White House in Washington. Photo by Xinhua News Agency reporter Hu Yousong

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. are all factors used to evaluate the "reciprocal tariff" rate.

2 Why is it inappropriate

Experts said that the United States' "reciprocal tariffs" proposition is deceptive and misleading. It actually violates economic laws, undermines international w88 norms, ignores the balance of interests negotiated in the multilateral trading system over the past eighty years, and the fact that the United States has long benefited from international w88. It has brought great harm to the United States and the world.

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

Take the coffee w88 as an example. 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. Therefore, both sides can benefit from importing coffee beans from countries with relatively low coffee bean production costs. 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.

On March 28, a customer purchased groceries at a supermarket in New York City, USA. Published by Xinhua News Agency (Photo by Guo Ke)

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 behavior to insist on all equivalence and complete equivalence.

Second, “reciprocal tariffs” violate WTO rules. According to the WTO's most-favored-nation principle, members cannot discriminate against their trading partners. If the United States reaches an agreement with a certain country to lower its tariff rate 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 with other members, it will also violate the rules.

Baristas prepare coffee during Coffee Week in Belo Horizonte, Brazil, on November 9, 2023. Photo by Xinhua News Agency reporter Wang Tiancong

Thirdly, "reciprocal tariffs" ignore the differences in the economic development levels of various countries, which is tantamount to depriving some developing countries of their right to development. 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 requires protection, its imposition of "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.

3 Planning behind the scenes

Experts pointed out that the Trump administration 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 motivations of the U.S. government’s recent tariff measures include: reducing the U.S.’s huge w88 deficit; promoting investment in the U.S. and accelerating the return of manufacturing; increasing tariff revenue to fill the fiscal gap caused by tax cuts; and using tariffs as a means of pressure to achieve economic and non-economic purposes.

On March 4, a consumer shopped in a store in Rosemead, Los Angeles County, California, USA. Published by Xinhua News Agency (Photo by Zeng Hui)

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. An article published on the British "Economist" weekly website stated that for each commodity, a single tariff rate will be replaced by hundreds of possible bilateral tariff rates. For products with supply chains spanning multiple countries, things will become extremely complicated.

4 Who is hurt the most

Until the U.S. government has clarified the details of "reciprocal tariffs", it is still unclear which countries will have the greatest impact from "reciprocal tariffs." However, most of the countries that impose higher tariffs on U.S. products are developing countries, including India, Brazil, Argentina, and Southeast Asian and African countries. 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. 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 will be 12%, South Korea will be 8.4%, Vietnam will be 5.1%, Mexico will be 3.9%, and Canada will be 3.4%, all higher than the 2.2% in the United States.

On March 10, in a British Columbia liquor store in Vancouver, Canada, store employees placed notices on the shelves supporting the purchase of Canadian products. Published by Xinhua News Agency (photo by Liang Sen)

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.

Attached original text link:https://mp.weixin.qq.com/s/9mB009s2GufX7uL3O6txMA