Chinese President Xi Jinping said that "tariff wars, trade wars and sci-tech wars go against the trend of history and the laws of economics, and there will be no winners." Recently, the US has imposed so-called "reciprocal tariffs," provoking a trade war, seriously undermining the international economic and trade order and bringing significant negative impacts to the global economy. The US' unilateral and protectionist act not only disrupts the international economic structure, but also exposes fundamental flaws in the legality and legitimacy of US trade policies under both international and US domestic laws.

In response to the US' economy bullying, China has already taken and will continue to take necessary measures, and has also initiated legal action through the WTO dispute settlement mechanism, demonstrating its firm stance on safeguarding the multilateral trading system and its image as a responsible major power.

Legal flaws of the US' abuse of tariffs

The US' imposition of so-called "reciprocal tariffs" reveals its mindset of instrumentalizing international law - invoked when convenient and ignored when not. By challenging multilateral rules with a hegemonic logic, the US has become a disruptor of the international rule of law, ultimately damaging its own global credibility.

The US' "reciprocal tariffs" violate the principle of "Pacta Sunt Servanda," a core principle of international law, undermining the foundations of international rule of law. The United Nations Charter proclaims the foundational status of this principle within the international legal system, requiring countries "to establish conditions under which justice and respect for the obligations arising from treaties and other sources of international law can be maintained."

The US' imposition of so-called "reciprocal tariffs" is a fundamental betrayal of this principle. There is no supranational entity in the international community to enforce and implement international legal norms. If countries are allowed to abandon their commitments, the normative and effective basis of international law will be lost, leading to chaos and disorder in the international community.

As a founding member of the WTO, the US should abide by the various obligations under WTO agreements and resolve trade disputes through multilateral negotiations and the dispute settlement mechanism under the WTO framework. Instead, the US has repeatedly refused to comply with rulings made by the WTO dispute settlement mechanism over the years, resulting in severe consequences such as the paralysis of the appellate body.

The US' "reciprocal tariffs" blatantly violate the principles of tariff bindings and most-favored-nation (MFN) treatment. This direct breach of treaty obligations is undoubtedly a disregard for the principle of "Pacta Sunt Servanda," undermining the foundations of international rule of law. Ironically, the US consistently claims to advocate for a "rules-based international order," while openly abandoning one of the core principles of international law: "Pacta Sunt Servanda." This fully demonstrates that the US' notion of "rules" is highly selective and instrumental, exposing its utter hypocrisy.

The US' "reciprocal tariffs" depart from the core obligations of the General Agreement on Tariffs and Trade (GATT) 1994 and distort the concept of multilateralism. The core obligations bound by WTO members include tariff bindings and MFN treatment, which are foundational to the multilateral trading system supported by the WTO with the aim of promoting free trade. The US' so-called "reciprocal tariffs" are fundamentally incompatible with these obligations and concepts.

First, "reciprocal tariffs" violate the MFN principle. The GATT 1994 places the MFN principle at the core of the system, requiring governments of member countries not to discriminate against any other member by providing less favorable treatment to the member's nationals or goods compared with any other country or region. The so-called "reciprocal tariffs" are discriminatory tariffs against imported goods, based on a questionable calculating formula, resulting in unequal treatment and a clear breach of the MFN principle.

Second, "reciprocal tariffs" violate the tariff binding rule. This rule requires members not to unilaterally raise tariff rates beyond the levels they committed to during negotiations. Under the US' so-called "reciprocal tariffs," the tariff levels faced by various countries are far higher than the average bound tariff rate of 3.5 percent committed to in the US tariff reduction schedule.

Third, the US' "reciprocal tariffs" distort the principle of reciprocity. The Marrakesh Agreement Establishing the WTO indicates that WTO rules and commitments are negotiated by members on a reciprocal and mutually advantageous basis. "Reciprocity" under WTO rules refers to mutual preferential treatment and facilitation in trade among trading parties, rather than an equivalence of tariff rates or import/export volumes. The US has misused the term "reciprocal" to pursue an unrealistic goal of "zero trade deficit," which confuses the WTO's principle of reciprocity. Such deceptive practices undermine the foundation of multilateralism.

Fourth, "reciprocal tariffs" undermine the multilateral trading system. The Marrakesh Agreement Establishing the WTO established a rules-based multilateral trading system, meaning that WTO members should manage their relationships through the formulation of rules or systems to achieve coordination and cooperation. When considering its own interests, the US directly ignores multilateral cooperation mechanisms and arbitrarily relies on unilateralism to achieve its objectives. This is in serious contradiction with the concept of rules-based multilateralism.

The US also abuses the WTO "national security exception," sharply increasing trade uncertainty. The GATT 1994 permits members to take exceptional measures when national security is genuinely at risk, temporarily exempting them from obligations under WTO agreements. However, the US has overstretched the concept of "national security," and abused the "national security exception" to evade treaty constraints.

In recent years, the US has imposed tariffs on steel and aluminum on multiple countries under the guise of protecting national security, violating rules of origin and others. WTO dispute settlement practices indicate that when members take trade measures based on the national security exception, their legality can be reviewed by multilateral institutions and is subject to principles such as good faith, and cannot be extended indefinitely. The US' actions clearly do not comply with these requirements; its overstretching of security disguises unilateralism as legal justification, resulting in damage and uncertainty for global trade.

The US' trade policy shows that its institutional checks and balances are out of control, and administrative power is expanding unchecked. Even when considering the US' domestic legal framework, the so-called "reciprocal tariffs" face a legal crisis. The US Constitution explicitly assigns the US Congress the power to set tariffs, yet the US administration has invoked the International Emergency Economic Powers Act (IEEPA) to bypass legislative approval and impose tariffs directly. 

Furthermore, the US' "reciprocal tariffs" were implemented without following the statutory procedures required under the IEEPA. They bypassed the US Congress entirely and were enforced via executive orders. This seriously violates the separation of powers, the principle of checks and balances, and the requirements of procedural justice stipulated in the US Constitution. Consequently, there have been many lawsuits in the US challenging the legality of the so-called "reciprocal tariff" executive order.

This abuse of the IEEPA not only undermines the rule of law in the US but also makes it increasingly difficult for relevant parties in the international community to anticipate US government actions, plunging the trade environment into a state of profound uncertainty, which is bound to hinder the development of international trade and also cause damage to the global economy.

Legal justification of China's countermeasures

On April 17, when holding talks with Cambodian Prime Minister Hun Manet, Xi called for sticking to the common values of peace, unity and cooperation, opposing unilateral bullying, and practicing true multilateralism.

The battle surrounding the so-called "reciprocal tariffs" is not just a contest of economic strength but also a manifestation of justice and righteousness. History has repeatedly proven that only by respecting rules and deepening cooperation can true "reciprocity" be achieved. China consistently upholds the spirit of the rule of law to safeguard fair trade, promote win-win cooperation and mutual benefit among all parties, and advance the building of a community with a shared future for mankind, injecting greater certainty and stability into the world economy and global governance.

China has defended the authority of the WTO through multilateral legal actions. In response to the US' so-called "reciprocal tariffs," China has followed the procedures set out in the "Understanding on Rules and Procedures Governing the Settlement of Disputes," and promptly submitted the issue to the dispute settlement mechanism of the WTO. This action not only upholds the authority of the WTO but actually highlights China's commitment to the rule of law as a responsible major power.

In stark contrast, the US has crippled the appellate body of the dispute settlement mechanism and blocked negotiations regarding reforms to the dispute settlement mechanism. At the same time, in past cases that it has lost, the US, while being fully aware of the body's disfunction, has attempted to evade compliance by filing appeals. These actions further expose its hegemonic logic of using rules when convenient and discarding them when not.

China's precise countermeasures are in accordance with Customary International Law. According to the "Responsibility of States for internationally wrongful acts: draft resolution," a country has the right to take countermeasures to compel the responsible state to cease its unlawful actions when it suffers harm from another state's wrongful acts. 

In the face of the US' so-called "reciprocal tariffs," China's tariff measures against the US exhibit three core legal features. First, they are proportionate - the intensity of the countermeasures corresponds to the extent of the US measures, and the scope is limited to goods originating from the US, avoiding escalation that could harm third-party interests, in line with the "principle of proportionality." Second, they have procedural legitimacy, as the measures are clearly authorized and required by China's Tariff Law and Foreign Trade Law, ensuring procedural fairness and transparency. Third, the measures took into consideration of market expectations, helping minimize disruption to regular trade by providing an exemption period for eligible goods.

China continues to pursue international cooperation in the spirit of true multilateralism. While the US indiscriminately imposes so-called "reciprocal tariffs" on economies worldwide, China released a white paper on April 9, clearly stating that the US' imposition of so-called "reciprocal tariffs" harms both itself and others, while emphasizing that China and the US can resolve economic and trade differences through equal dialogue and mutually beneficial cooperation. 

On April 14, during a meeting with General Secretary of the Communist Party of Vietnam Central Committee To Lam, Xi said that a small boat with a lone sail cannot withstand rough seas, noting that only by working together in the same boat can they ensure stability and long-term progress.  

China's adherence to the concept of multilateralism in terms of legality and legitimacy demonstrates that, in the context of a turbulent international situation, insisting on expanding various forms of multilateral cooperation is a defense of multilateralism. It also demonstrates that multilateralism is not a purely outcome-oriented arrangement, but a continuous pursuit, especially in the face of turbulence in the international situation.


This article first appeared in the Global Times:

https://www.globaltimes.cn/page/202504/1332736.shtml