Unilateralism challenges multilateral trading system, necessitates global efforts for coordinated development

Editor's note: Zhou Jianjun is an assistant researcher at the Institute of State System Research and School of Economics, Zhejiang University. The article reflects the author's opinions and not necessarily the views of CGTN. It has been translated from Chinese and edited for brevity and clarity.

This year marks the 30th anniversary of the founding of the World Trade Organization (WTO). Over the years, the multilateral trading system, with the WTO at its heart, has become a cornerstone underpinning economic globalization and free trade. 

Together with regional free trade agreements such as the Regional Comprehensive Economic Partnership and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, this system has fostered an open, stable, and predictable trade environment for global trade liberalization and investment facilitation. 

However, recently, the US government has aggressively pursued tariff measures, compelling countries such as those in the EU to erect defensive barriers and retaliate with tariff measures.

The imposition of tariffs undermines global trade, and historical lessons should not be overlooked

The reciprocal tariffs introduced by US President Donald Trump have been met with major international backlash, and the magnitude and measures taken remind people of the infamous Smoot-Hawley Tariff Act of the last century. In 1930, then US president Herbert Hoover signed the Smoot-Hawley Tariff Act, imposing steep tariffs of up to 60 percent on over 20,000 imported goods on the grounds of protecting domestic industries and alleviating unemployment pressures. 

However, this act failed to deliver the intended results and instead provoked retaliation worldwide, leading to grave consequences. As a result, US unemployment soared from 8.7 percent in 1930 to 24.9 percent in 1933, while trade volume fell by approximately 67 percent from 1929 to 1932. 

Moreover, global trade also contracted by 66 percent between 1929 and 1934. These unilateral tariff measures not only disrupted global trade but also exacerbated the Great Depression, sowing the seeds for the outbreak of World War II. This year also marks the 80th anniversary of the end of World War II, as well as China's victory in the War of Resistance against Japanese Aggression and Russia's triumph in the Great Patriotic War. 

In this context, we must heed the lessons that history has taught us. The US tariff policy is detrimental to global trade development and will erode and even dismantle the foundations of the multilateral trading system.

Reciprocal tariffs will lead to serious consequences, and no country can remain unaffected

It has now been over a month since implementation of the reciprocal tariffs, and the latest data has already reflected their adverse consequences. The US economy contracted at an annualized rate of 0.3 percent in the first quarter of 2025, marking the first decline in three years. 

In March, the US international trade deficit surged by 14 percent month-on-month to a record high of $140.5 billion. In April, the US Index of Consumer Sentiment, Index of Consumer Expectations, and Current Economic Conditions declined significantly to 52.2, 47.3, and 59.8, respectively, from 57.0, 52.6, and 63.8 in March. 

China's manufacturing PMI for April stood at 49.0 percent, down 1.5 percentage points month-on-month, the lowest in a year. The global manufacturing PMI also dropped to 49.1 percent, down 0.5 percentage points month-on-month. 

These indicators provide compelling evidence of the adverse shock that the reciprocal tariffs are inflicting on the global economy. 

This is just the beginning, and the fallout is far from over. According to the latest report released by the WTO Secretariat on April 16, under current conditions, the volume of world merchandise trade is likely to fall by 0.2 percent in 2025; if the situation worsens, trade growth could fall to -1.5 percent. 

A deterioration in trade will lead to an economic downturn. JPMorgan has raised the risk of a recession in the global economy from 40 percent to 60 percent. In its April 2025 World Economic Outlook, the IMF downgraded its forecast for global GDP growth from 3.3 percent in January to 2.8 percent.

Countries must join hands to uphold the multilateral trading system and promote coordinated global development

In today's global landscape, unilateralism enjoys little support, and no one wins in a trade war. China remains committed to advancing a multilateral trading system that is fairer, freer, more transparent, and non-discriminatory, while resolutely countering the US imposition of reciprocal tariffs. 

In addition, China has rolled out a series of policy measures to expand high-standard opening up, such as liberalizing the services sector and introducing policies aimed at stabilizing foreign investment. 

The country has made concrete steps to promote coordinated development and share the fruits of its growth with the world. It is imperative that countries work together to safeguard the multilateral trading system, curb the outrageous unilateralism pursued by the US, and bring this tariff war to an end as soon as possible. 

Only by doing so can we bring greater certainty to an increasingly volatile world and prevent the world economy from slipping into another Great Depression.