Richard Baldwin Giorgio Barba Navaretti
President Trump’s trade policy has oscillated dramatically, climaxing recently in unprecedentedly high and broad tariffs which he claims are “reciprocal” – just levelling the playing field. This column argues that the 2 April tariffs fundamentally misinterpret “reciprocity” as well as violating the core WTO principles of non-discrimination and respecting the outcome of historical tariff negotiations (bindings). This shift signals a dangerous ideological turn towards mercantilism. Drawing lessons from history, especially the economic chaos following the 1930 Smoot-Hawley Tariffs, the authors recommend reinforcing established GATT norms of marginal reciprocity and unconditional MFN to safeguard global economic stability. The international community should urgently resist America’s mercantilist slide to avoid repeating historical mistakes.
Πηγή: Voxeu