Economists warned of the severe consequences for the global economy amid the uncertainty brought by Trump's tariffs.

by Xirui Li

NEW YORK, March 17 (Xinhua) -- Experts warned that U.S. President Donald Trump's proposal for "reciprocal tariffs" is adding uncertainty to international trade.

On Wednesday, the Trump administration raised global steel and aluminum tariffs to 25 percent and set an April 2 deadline for implementing reciprocal tariffs -- matching U.S. tariffs on foreign goods to the rates those countries impose on U.S. products.

This policy quickly provoked retaliation from Canada and the EU, prompting Trump to threaten a 200 percent "counter-counter tariff" on alcoholic products from the EU on Thursday.

These developments, along with Trump's recent "on-and-off" tariff policies toward Mexico and Canada, are the latest in a series of tariff measures announced by Trump under his so-called "Fair and Reciprocal Plan," a presidential memorandum he signed on Feb. 13 to address "longstanding imbalances" in global trade.

Under Trump's proposal, the United States would establish different tariff rates for different countries based on a comprehensive assessment of their trade openness.

However, many experts argue that the trade policy is undermining the global trading system, creating uncertainties for global businesses and eventually backfiring on the U.S. economy.

"A decision to unilaterally increase U.S. import tariffs, product by product, country by country, would be President Trump's biggest blow yet to the rules-based trading system," Chad Bown, a senior fellow at the Peterson Institute for International Economics, told the New York Times.

He said Trump's tariffs would violate World Trade Organization (WTO) rules in two ways: applying different tariff rates to different countries would violate a commitment by WTO members not to discriminate against one another; and if the United States raises its tariff rates beyond the maximum rate it has negotiated with other members, that would break trading rules, too.

Gary Clyde Hufbauer, a nonresident senior fellow at the Peterson Institute for International Economics, told Xinhua that "reciprocity" meant overall balance, in terms of concessions given and concessions received, between each country on the one hand and all its trading partners on the other hand, but Trump has redefined the meaning of "reciprocity" to apply on a line item basis, country by country, rather than overall balance.

Economists warned of the severe consequences for the global economy amid the uncertainty brought by Trump's tariffs.

"We're now facing a new crisis," said Bank of Canada Governor Tiff Macklem.

"Depending on the extent and duration of new U.S. tariffs, the economic impact could be severe," he added. "The uncertainty alone is already causing harm."

"If the world embarks on the path towards a trade war, this will have an extremely negative impact on the growth prospects of the global economy," European Central Bank Vice-President Luis de Guindos told Xinhua in an interview.

"Increases in tariffs and quotas are a negative supply shock, especially if accompanied by retaliation. This vicious circle should be avoided," he said.

Meanwhile, some experts warned that such moves would undermine U.S. credibility in trade negotiations and dampen its own economy.

Craig Allen, former president of the U.S.-China Business Council and now a senior counselor at the Cohen Group in Washington, D.C., noted that trade policy uncertainty is driving more outbound U.S. investment.

Highlighting the robust growth in Asian markets, Allen argued that U.S. firms seeking to benefit from this growth are being pushed to invest in these markets instead of doing trade with them due to trade barriers, hurting American workers and the broader U.S. economy.