Insights丨Expert says U.S.’ "reciprocal tariffs” a poison, not a medicine

By Chen Tianhao, Feng Shuang

(ECNS) -- A new round of steep tariffs imposed by the U.S. administration took effect early Wednesday morning on products imported from scores of countries around the world. And also on the same day, U.S. President Donald Trump abruptly backed off his tariffs on most nations for 90 days.

Such a move by the U.S., while outwardly framed as an adjustment, is in reality a form of tariff coercion, as Dan Steinbock, founder of Difference Group, pointed out.

Steinbock further noted that such policy "builds on unwarranted tariffs” and furthermore with “flawed reciprocal tariffs calculated erroneously”, and finally, more “new tariffs that have more in common with economic blackmail than international cooperation."

 

No “pros” in “reciprocal tariffs”

Steinbock told China News Network that the move by the U.S. administration reveals America’s unilateralism geopolitical strategy, noting “it is a protectionist plan and devoid of an economic rationale”.

He pointed out that even if the so-called “reciprocal” principle was to be taken seriously, which would be a cardinal mistake, the tariff against Vietnam should be 12%, not 46%; against China, 10% not 34%; against the EU, 10% not 20%, based on the data from the American Enterprise Institute (AEI).

Therefore, the so-called “reciprocal tariffs” are not reciprocal at all. “Most international economists agree that such tariffs have little or nothing to do with economics, and they regard them as blackmail and bullying, at the expense of the Global South”, said Steinbock.

Only “uni-” in “unilateralism”

In addition, Steinbock believes that the so-called reciprocal tariffs are, in essence, an attempt to use tariffs as a tool to undermine other countries’ competitive advantages in the global industrial chain, force a reshuffling of the international market, and ultimately secure America's dominant position in the global economy.

“The U.S. administration mistakes ‘medicine’ with poison and ‘negotiations’ with paying tribute,” Steinbock observed, therefore bringing troubles to the world economy by accelerating the unraveling of globalization.

Also, a plunging trend of world investment is also foreseeable, Steinbock noted, adding that decades of postwar globalization fruit derives from close collaboration between countries and distribution along the value chains, but now globalization is facing unprecedented challenges due to the unilateral policy from the U.S. administration.

“Left unchallenged, the ‘reciprocal tariffs’ will leave global economic integration unraveling,” Steinbock warned.