At the General Council meeting on 19 February, China proposed the agenda item “Heightened Trade Turbulence and Responses from the WTO”, calling on members to address the global instability triggered by tariff shocks. Yet today, over a month later, the situation has dangerously escalated. The so-called “reciprocal tariff” —a unilateral measure that blatantly violates WTO principles —now threatens to further destabilize global trade. As one of the affected members, China expresses grave concern and firm opposition to this reckless move.

On 5 April, the Chinese government issued its official position, condemning this measure a typical act of unilateralism, protectionism and economic bullying. We believe CTG is the right place for us to raise this concern, which is shared by almost all WTO members. Today we wish to underscore three key points from the perspective of safeguarding the WTO’s authority and effectiveness, a cause to which many in this room, including myself, have dedicated decades of efforts of our career.

First of all, the so called "Reciprocal Tariff" Violates WTO Rules and Undermines the Multilateral Trading System.

What is reciprocal? In the preamble of the Marrakesh Agreement, it is mentioned that “by entering into reciprocal and mutually advantageous arrangements…...”. “Reciprocal” here refers to mutual granting of preferential treatment and facilitation between trading partners with a view to reach the overall balance of rights and obligations of members in the multilateral trade agreements. The renowned American scholar Robert Keohane describes this as “diffuse reciprocity”, that is a multilateral equilibrium that balances rights and obligations dynamically and inclusively. Yet, the so called “reciprocal tariff” is narrow, self-serving, and economically coercive. Its executive order openly declares: “Reciprocal trade is America First trade.” This is not reciprocity—it is prioritizing U.S. interests at the expense of others’ legitimate rights.

As early as October 1995, the former Director-General of the WTO RENATO RUGGIERO rightly pointed out in his speech at Harvard that “to present reciprocity as an alternative to MFN is a major departure from the trading system we have built up over 50 years, and it is just the opposite of what the founding fathers of the multilateral system envisaged.” He concluded, “Trade is technical in its substance but highly political in its consequences. Reciprocity as a structural alternative to the multilateral system equals bilateralism; bilateralism equals discrimination; and trade relations based on power rather than rules are the result. This would be a very dangerous departure from the success story of the multilateral system. ”

Dear colleagues, as we all recognize the calculations of the so-called reciprocal tariff are subjective and defy basic economic logic. Nobel laureate Paul Krugman rightly labeled them as “malignant stupidity.” 

The so-called "reciprocal tariff" constitutes a severe infringement on members’ right to development, particularly for LDCs and vulnerable economies. Myanmar, an LDC still reeling from a devastating earthquake, faces an exorbitant 44% tariff. Even an uninhabited island, home only to penguins and seals, is subject to a 10% tariff. Across the board, developing and least-developed members are hit with discriminatory rates of 30%-50%, arbitrarily imposed without regard to their economic realities. These measures violate the MFN principle and contravene the U.S.’s own tariff binding commitments under WTO rules. Moreover, they defy the principle of "less than full reciprocity"—a cornerstone of special and differential treatment for developing members, clearly stated by Article XXXVI:8 of GATT 1994.

The so-called “reciprocal tariff” has set the very architecture of the multilateral trading system ablaze. This system was born from a reflection on the catastrophic consequences of the 1930s "beggar-thy-neighbour" trade wars. The rules we uphold today are the product of more than 70 years of painstaking negotiations, with the WTO at its core serving as the indispensable foundation for global trade and postwar economic stability. MFN-based tariff commitments ensure trade is conducted transparently, predictably, and without discrimination. Since the WTO’s establishment, global trade has surged from $6 trillion in 1995 to $30 trillion in 2023, which has proved the system’s success as an engine of growth and development. The MTS is a hard-earned global public good. No member—no matter how powerful—has the right to dismantle it.

Yet today, the very nation that helped build this system now disregards its principles. After paralyzing the Dispute Settlement Mechanism, it now undermines the MTS’s foundational rules. The stakes are high for all members, big or small. Some members hope to evade the storm by unilaterally lowering the tariffs. But the reality is, no one is safe when the house itself is burning. It must be emphasized that any tariff reduction measures must strictly comply with the MFN principle, ensuring equal benefits for all members, and avoiding de facto discriminatory preferences for specific ones. Such measures must not come at the expense of the legitimate interests of other members, as this could trigger a chain reaction and further destabilize the multilateral trading system.

Second, the US is a key beneficiary of the multilateral trading system, and assessing its gains solely through trade deficits or surpluses in goods is a narrow and misleading approach.

As the driving force behind the GATT and the subsequent eight rounds of trade negotiations, the U.S. has seen its multinational corporations, tech firms, consumers, and agricultural sector reap substantial rewards from global trade liberalization and facilitation. Following the WTO’s establishment, the U.S. played a pivotal role in advancing major agreements such as the ITA, TFA and so on, all designed to benefit its domestic industries.

From a broader perspective, the U.S. remains a primary beneficiary of the current global trading order and a dominant force in global value chains. It leads the world with 136 companies in the Fortune 500, dominating sectors like technology, finance, manufacturing, and healthcare. The U.S. consistently runs a services trade surplus, generating approximately $300 billion in net revenue in 2024, and supporting 4.1 million domestic jobs. Additionally, American firms earned over $144 billion in intellectual property royalties and licensing fees last year alone.

Given these facts, it would be reasonable to adopt a more balanced and comprehensive view of global trade rather than portraying themselves as victims. After all, confidence—not grievance—is what will help us collectively overcome future challenges.

Last but not least, the so called “reciprocal tariff” is not—and will never be—a cure for trade imbalances. Instead, they will backfire, harming the U.S. itself.

The attempt to address trade deficits by imposing so-called “reciprocal tariffs” on all trading partners is akin to “treating the wrong illness with the wrong medicine.” The root of America’s trade deficit lies in its structural imbalances, including excessive consumption, insufficient savings, and the dollar’s dominance in global finance. Reciprocal tariff will not fix these issues. Instead, they are a Pandora’s box of economic harm, fueling inflation, increasing living costs, disrupting supply chains, distorting market efficiency, and ultimately damaging the U.S. economy. According to the PIIE, over 90% of tariff costs will fall on U.S. importers, manufacturers, and consumers, eroding the foundations of global cooperation and risking a U.S. recession with worldwide spillover effects.

History is the best teacher. The Smoot-Hawley Tariff Act of 1930, enacted at the onset of the Great Depression, sought to shield U.S. farmers and industries from foreign competition. Instead, it triggered retaliatory trade wars, deepened the global economic crisis, and was later condemned as “the worst policy mistake of the 20th century.” Today, the U.S. risks repeating the failed story in history. The so-called reciprocal tariffs would raise America’s average tariff rate from 2.4% to 25.1%—surpassing even Smoot-Hawley levels. Given that global trade is now three times larger than in the 1930s, Paul Krugman warns the damage could be far more severe. Studies by the Chinese Academy of Social Sciences project that reciprocal tariffs could reduce global trade by 8.2%, increase U.S. core inflation by 1.9 percent and cut U.S. real GDP growth by 1.3 percent.

Following the U.S. announcement, China swiftly enacted countermeasures to resist unilateral coercion. While China opposes trade wars, it will firmly defend its legitimate interests. We echo DG’s call for members to use the WTO as a platform for dialogue and cooperation. And we encourage the WTO Secretariat to study the impact of reciprocal tariffs on the global trade, and report its findings to members.

Dear colleagues, as a staunch supporter of the multilateral trading system, China firmly believes all trade disputes should be resolved through the WTO's established mechanisms. Now is not the time for unilateral actions, but for unity. We call upon all members to stand together in safeguarding the rules-based multilateral trading system we have collectively built over decades. Together, we must preserve this vital system for future generations.