The U.S. decision to impose "reciprocal tariffs" on imports from all trading partners was widely criticized on Friday by experts who called the move "unfounded" and stressed that other countries will take the opportunity to strengthen trade among themselves.
Amid widespread opposition, U.S. President Donald Trump on Wednesday signed an executive order on the so-called "reciprocal tariffs", imposing a 10-percent "minimum baseline tariff" on all countries and higher rates on certain trading partners.
Speaking in a panel discussion on China Global Television (CGTN), experts rejected the administration's claims that other countries have taken unfair advantage of the U.S. trade deficit.
"It's an extremely strange situation that we're in right now. The U.S. has actually benefited hugely from a global open trading market despite having a trade deficit. So that concept of it being equal or zero just doesn't make sense," said Adam Dunnett, secretary general of the European Union Chamber of Commerce in China.
Madhav Nalapat, vice-chair of the Manipal Advanced Research Group, highlighted that Trump's desire for the U.S. to punish its trade partners dates back to the 1980s, when he lamented the decline of the country's manufacturing industry.
"Trump is sticking to his textbook. He has been having the same textbook 40 years. And yes, I agree the world has changed in 40 years. But the textbook that Trump has been using is the same which he began using, from what I'm talking about, 40 years ago. I'm surprised that anyone is surprised by what he has done. And the reality of situation is that he has been talking about an absence of a trade deficit with any country. Now yes, frankly, I also don't think it's a good solution in every circumstance," said Nalapat.
In all, the economists believe that this approach will ultimately isolate the United States, leaving other major economies to strengthen cooperation through multilateral trade frameworks.
"I think while the U.S. want to isolate it's, well, let them do it. But then somebody needs to carry on this global regime of free trade. And that's where the EU, China, Japan, South Korea, the rest of the world except the U.S. comes in. So, like you mentioned, there are many multilateral trade regimes we have created in the past -- RCEP is one, TPPCP is one, and obviously the WTO is one," said Takuji Okubo, managing director and chief economist for Japan Macro Advisors Inc.
"We have to work together if we can't work with the U.S. right now. We should try and solve the issues that we have together at a bilateral or regional level as well. The EU in its response to these and other issues in the past has been if we can't work together, then we'll find other people to work with. And I think the EU has actually demonstrated that quite strongly by having a number of free trade agreements that have been signed in the region with South Korea, with New Zealand, with Vietnam. And again, EU and China have also been talking about a potential agreement as well," said Dunnett.
Experts slam US tariffs, see opportunities for global cooperation without US
Experts slam US tariffs, see opportunities for global cooperation without US
