According to the MFN rule, WTO members must apply the lowest tariffs that they apply to the products of any one country to the products of every other country.3 However, WTO members can charge higher tariffs if they apply these nonreciprocal tariffs to all countries.The practical result has been the systematic exploitation of American farmers, ranchers, manufacturers, and workers through higher tariffs institutionalized byMFN. This systemic trade imbalance serves as a brake and bridle on both GDP growth and real wages in the American economy while encumbering the U.S. with significant foreign debt.The second challenge is part of the broader existential threat posed by the Chinese Communist Party (CCP) in its quest for global dominance. However, Com-munist China’s economic aggression also extends to an intricate set of industrial policies and technology transfer–forcing policies that have dramatically skewedthe international trading arena.Both the unfair, unbalanced, and nonreciprocal trade institutionalized by the WTO and Communist China’s economic aggression are weakening America’s manufacturing and defense industrial base even as the fragility of globally dispersed supply chains has been brought into sharp relief by the COVID-19 pandemic with its associated lockdowns and other disruptions and by the Russian invasion of Ukraine.
Author: Menzie Chinn
Published at: 2025-12-28 22:51:32
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