The view from China: ‘Reciprocal tariffs’ only lead to reciprocal suffering

Editor’s Note: The following is a guest editorial from Xinhua News Agency, the central news service in the People’s Republic of China. In response to Trump’s declaration of a worldwide trade war on April 2, China levied 34% tariffs on U.S.-made goods, still a far cry from the 54% import taxes imposed on imports from China (though in some product categories, the tariff is 100%). In this article, the editors at Xinhua warn against the damage a global trade war would bring and urge the Trump administration to pursue negotiation and dialogue instead.

The world is approaching painful times as the U.S. administration’s so-called “reciprocal tariffs” arrive. It is an undeniable reality that the United States is trying to defend its hegemonic position in the world economy, but these measures may well end up backfiring.

For its major trading partners, U.S. enthusiasm for tariffs is nothing new. The U.S. administration has imposed a 10% “minimum baseline tariff” on the entire world and even higher rates on certain trading partners, including China, Vietnam, India, and others.

To some extent, Washington’s flagrant bullying practice indicates the U.S. administration’s growing jitters and anxiety concerning the retention of its position of superiority in an increasingly globalized world. However, it’s ridiculous that the United States opts for protectionism instead of embracing the trend of the times. Playing the “tariff card” is a lose-lose game that also hurts the United States itself.

If the U.S. administration fully follows through with its tariff plans, it will further elevate what are already the nation’s highest tariff levels in decades. Leading U.S. economists have warned of high implementation costs and collectively voiced concerns about grave consequences – such as higher consumer prices, increased inflation, a rise in unemployment, and even an economic recession.

According to a Yale University study, reciprocal tariffs will incur the United States a price level rise of 2.1% at minimum, should other countries choose to retaliate. This is equivalent to a loss of thousands of dollars per household on average. Meanwhile, overall U.S. economic growth will drop by one percentage point in 2025.

Notably, classical Western capitalist economics underlines the benefits of free trade and the division of labor. America’s leaders should know the country can never return to the low-wage sectors of the global supply chain. What the U.S. administration is doing goes against basic economic laws.

Tariffs will cause damage across the board. Retaliation is already happening, and more will certainly come. By announcing the so-called “reciprocal tariffs” scheme, the U.S. administration is dealing a heavy blow to the world trading system and the global economy at large.

For example, the Organization for Economic Cooperation and Development (OECD), in its latest Economic Outlook, forecast that global GDP growth is projected to moderate to 3.1% in 2025 and 3% in 2026. The OECD is also warning that higher and broader trade barriers will negatively impact growth around the world and add to inflation.

Any attempt to curb trade flows in the global village will backfire. Unchecked protectionism has the very real potential to trigger trade wars, with catastrophic consequences for all parties concerned, while also destabilizing the global economy. A stable and predictable trading environment should not be a luxury. It is a necessity for healthy global economic growth. Equal dialogue is the only viable approach to resolving trade disputes while bullying tariffs make things worse.

Building a better world requires shelving the obsession with tariffs and pursuing shared development based on openness and cooperation.

As with all op-eds and news-analytical articles published by People’s World, the views expressed here are those of the authors.