(Source: China Business News 2025-04-04)
On June 17, 1930, Hoover, who was known as the first "Business President" of the United States because of his successful business in China, signed the infamous "Hawley-Smoot Tariff Act" regardless of the joint opposition of 1,028 economists and the threats of retaliation from many trading partners, raising the average tax rate on U.S. taxable imported products to more than 40%. This immediately triggered w88 retaliation from more than 40 countries, led by Canada, the largest trading partner of the United States, and the worst w88 collapse and economic crisis in history. In the following three years, U.S. imports and exports plummeted by 70%, industrial production dropped by 55%, and the unemployment rate increased from 4.6% to 24.9%.
History always repeats itself inadvertently. On April 2, 2025 Eastern Time, the United States regarded tariffs as a magic weapon to revive the American manufacturing industry. It arbitrarily increased tariffs in the name of "reciprocity and fairness" and pointed the finger at many trading partners, including close allies. Although this also triggered strong opposition and concern from international public opinion and trading partners, the United States still went its own way. Therefore, breaking first is the only way to build up later. The United States must completely subvert the global w88 and monetary system established under the leadership of the United States, regardless of cost and reputation, so that it can rely on its existing comprehensive national strength to re-create an international order that is beneficial to the United States, rebuild a manufacturing industry with a complete system, leading technology and competitiveness in the United States, and then rebuild American hegemony.
However, the ideal is very full and the reality is very skinny. The lofty dream of "making America great again" itself has many logical flaws that are difficult to reconcile, and it will also face endless practical obstacles.
First of all, although there are some problems in the current U.S. economy, it is far from a state that requires scrapping, healing, and starting over. From 2016 to 2024, the U.S. GDP will grow from US$18.8 trillion to US$27.7 trillion. The growth rate is unique among developed countries, and the unemployment rate has remained low. Even the "declining" manufacturing industry grew from $2.1 trillion to $2.9 trillion. However, from the perspective of the U.S. government, the U.S. economy seems to be in shambles and useless, so the U.S. economy needs to be completely dismantled and rebuilt. But on the other hand, the U.S. government is extremely superstitious about the deterrent power of the United States. It seems that as long as the tariff stick is used, all countries will be indifferent. This in itself is very illogical.
Secondly, the U.S. government now seems to realize that the strong position of the U.S. dollar is the key reason for the U.S. w88 deficit and the relative weakness of the manufacturing industry. This is indeed true in economics. The so-called Triffin Paradox illustrates the dilemma the United States faces between maintaining a strong dollar and maintaining a current account balance. But judging from the experience of the past 50 years, the current account deficit will not cause fundamental problems in the U.S. economy. Therefore, on the whole, maintaining a strong dollar is more in line with the overall interests of the United States. The United States has even threatened the BRICS countries to take severe retaliatory measures if they try to subvert the dominance of the dollar. Therefore, it is actually an impossible task for the United States to not give up the strong dollar and also try to reduce the w88 deficit.
Third, mirror-equivalent tariffs have never existed in history and are completely a fictitious delusion. Although the United States claims that all countries should implement reciprocal tariffs, it seems reasonable. However, historically, countries have long determined their own tariff levels based on their own economic conditions, without the concept of international reciprocity. It was only after the United States implemented the Reciprocal w88 Agreements Act in 1934 that international coordination of tariffs gradually became the norm. But since then, no country has ever asked another country to implement exactly the same tariffs as itself, because tariffs are only one factor that determines international competitive status. There are also many factors such as exchange rates, transportation costs, domestic tax systems, etc. that will affect the international competitive landscape. Therefore, simply pursuing reciprocal tariffs makes no sense. Tariff negotiations under the framework of the WTO and regional w88 agreements are based on the specific international and domestic market conditions faced by various countries' industries. Governments of various countries comprehensively consider various factors and then reach mutually agreeable tariff rates. In fact, there is no unified judgment standard. Therefore, Trump’s reciprocal tariffs are nothing more than an excuse to reduce the w88 deficit and rebuild the manufacturing industry. Although it seems reasonable at first glance, it is actually illogical at all.
It must be admitted that during and after World War II, the United States made important and positive contributions to world peace and economic development. The global system established under the leadership of the United States has indeed benefited many countries. However, all countries are making their due contributions to this system, and no country is what the United States calls a free rider or an advantage. The United States' former leadership position does not give the United States the power to act arbitrarily. The United States' international reputation and status depend on whether it continues to assume its due obligations for the global order. The so-called reciprocal tariffs are reversing the course of history, violating economic laws and historical justice, and deliberately undermining the global w88 order that countries worked together to build after the war.
On the one hand, this directly challenges the cornerstone of the WTO - the principle of most-favored-nation treatment. According to the WTO most-favored-nation principle, the benefits, preferences, privileges or exemptions granted by a member to products originating in or shipped to other members should be immediately and unconditionally granted to the same products originating in or shipped to all members. However, Trump tried to form a differentiated tariff system in a "one by one" manner through bilateral negotiations and unilateral pressure, which seriously violated the WTO most-favored-nation principle. In addition, if the United States raises tariff rates above the maximum levels agreed in agreements with other members, it will also violate bound tariff obligations. On the other hand, the United States' unilateral actions may trigger a global wave of tax increases and cause a systemic impact on the WTO. The United States' imposition of unilateral tariffs on major trading partners may lead these countries and regions to take retaliatory measures. This chain reaction not only intensifies w88 frictions between countries, but also puts WTO rules at risk of being hollowed out in actual operations, because countries are more inclined to solve problems through bilateral retaliation rather than relying on multilateral dispute settlement mechanisms. As more and more countries join the ranks of imposing tariffs on each other, the global trading system may accelerate fragmentation and form multiple trading blocs or camps. This will greatly reduce the influence and role of the WTO as a unified global multilateral trading system and further impact the multilateral trading system.
Judging from the current situation, the US government is very determined, and I am afraid that only the Southern Wall can make it turn back. Whether this southern wall can be erected as soon as possible depends on whether other WTO members can firmly safeguard the multilateral trading system and adhere to the principle of non-discrimination. Under the current situation, the best choice for all countries is to resolutely oppose U.S. unilateralism, take necessary countermeasures, resolutely withstand U.S. economic coercion and bullying, and stick to existing WTO rules and commitments in relations with other trading partners. In addition, other WTO members should work hard to explore new paths and restore the WTO's negotiating functions and dispute settlement mechanisms in a flexible manner in the absence of the United States to maintain and promote the smooth development of world w88. It also made the United States feel the unbearable cost and pressure of isolating itself from the international system, and finally returned to the multilateral trading system. We still believe that beggar-thy-neighbor isolationism will only ultimately isolate oneself, while true multilateralism must be mutually beneficial and win-win. Although history will inevitably experience twists and turns, human beings will eventually continue to make progress.
（Author: Tu Xinquan, China World w88 Organization Research Institute, w88 casino）
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