From MFN to “reciprocal tariffs”

Overview & Synopsis

It is much too soon to speculate about the long-run impact of the second Trump administration’s trade policy, since we don’t know what it will be next week, let alone four years from now. But what we do know is that 2 April 2025 marked a brutal rupture with 90 years of American foreign economic policy that have shaped the world we live in. The symbolism was stark. By awarding each trading partner its own “reciprocal” tariff, the government of the US was tearing up the central foundational principle of the GATT and its successor organisation, the WTO, namely, the principle of non-discrimination enshrined in Article 1 of the GATT. Since it was the US itself that had been the great promoter of non-discrimination in trade – a position it had held since the 1930s – the events of 2 April marked the end of an era.