BEIJING, March 13 (Xinhua) -- U.S. President Donald Trump has set an April 2 deadline for implementing global reciprocal tariffs, meaning his country will impose tariffs equivalent to those charged by other nations.

However, this approach has drawn widespread criticism for its potential to undermine the established multilateral trade system and damage both the U.S. economy and the global market.

Here is why the U.S. reciprocal tariff policy is flawed.

WHAT'S WRONG WITH THE POLICY?

Liang Guoyong, a senior economist at the United Nations Conference on Trade and Development, said that the initiative is an effort to narrow the persistent trade deficit, boost federal revenues, and encourage the reshoring of manufacturing activities to revitalize strategic industries.

However, observers have said that despite these seemingly practical objectives, the policy is fraught with fundamental flaws.

At its core, the reciprocal tariff strategy disregards the well-established economic principle of comparative advantage. According to this principle, countries benefit from specializing in the production of goods for which they have a cost advantage, and then engage in trade with one another.

In a recent article released by the Cato Institute, Scott Lincicome, vice president of economics and trade at the Washington-based think tank, takes coffee as an example. Because of climate and geography, the United States produces relatively little coffee, imports a ton, and -- to the delight of caffeine addicts everywhere -- applies no tariff on imports of green coffee beans. Brazil, on the other hand, is the world's largest coffee exporter and applies a 9 percent tariff on imports.

Under a reciprocal tariff regime, the United States would mindlessly match Brazil's tariff, thereby accomplishing nothing for U.S. exports while harming millions of American coffee roasters and consumers.

"Plenty of other food and beverage products, along with specialty or name-brand manufactured goods, are made only by specific countries and companies and would thus suffer the same fate. How silly is that?" said the article.

Reciprocal tariffs threaten to dismantle a trade framework that the United States itself helped establish, said Tu Xinquan, dean of the China Institute for WTO Studies at the University of International Business and Economics.

Since the enactment of the 1934 Reciprocal Trade Agreements Act, the United States has been a staunch advocate of multilateral trade agreements based on the most-favored-nation principle, whereby any favorable trade terms extended to one country are automatically applied to all others with which the United States has similar agreements.

A stable multilateral trade system which has, for all its flaws, fostered miraculous rises in global prosperity would give way to arbitrary judgments made in the Oval Office, The Economist said in an opinion piece last month.

Critics also highlight the inherent unfairness of imposing uniform tariff rates irrespective of a country's level of economic development. Under current World Trade Organization (WTO) guidelines, tariff structures are designed to reflect the developmental stages of different nations.

Developing countries often enjoy higher tariff rates on imports as a protective measure for their budding industries, while developed countries benefit from lower tariffs that facilitate open trade, said Liu Feitao, vice president of the China Institute of International Studies.

By insisting on equal tariffs, the United States would effectively strip developing nations of their ability to nurture their domestic industries. This could exacerbate global inequality, Liu added, as poorer countries lose critical policy tools to support their economic growth, further widening the gap between rich and poor nations.

If America decides that fairness means going tariff-for-tariff with all 180 or so trade partners, enacting that would produce around 2.3 million individual tariffs and result in outsourcing its trade policy to countries with entirely different industrial structures and interests. This could lead to absurdities, The Economist noted in another February article.

There are clear and immediate consequences for American consumers and the domestic economy. Economic forecasts by Yale University suggest that even in the absence of retaliatory measures from trading partners, U.S. consumer prices could rise 1.7 percent in the short term.

Should other nations respond with their own tariffs, price increases could be 2.1 percent, potentially dampening personal consumption expenditure and slowing overall economic growth.

WIDE BACKLASH

The international reaction to the proposal has been overwhelmingly negative. Analysts have condemned the move as a return to unilateralism and protectionism -- tactics reminiscent of a bygone era of power politics.

Liu pointed out that if the "reciprocal tariffs" go into effect, they would alter the multilateral trade system based on rules such as the most-favored-nation treatment, further exacerbating the fragmentation of the global trade system.

Prominent international voices from the European Union to the WTO warn that unilateral tariff adjustments will not only strain diplomatic ties but also trigger a cascade of retaliatory measures, potentially igniting a full-blown trade war.

"Tariffs are taxes. They are bad for business, and worse for consumers. They are disrupting supply chains. They bring uncertainty for the economy," European Commission President Ursula von der Leyen said in a statement.

While protection through tariffs may "relieve" struggling U.S. industries, it comes with a cost, CNBC reported, citing Lydia Cox, an assistant economics professor at the University of Wisconsin-Madison and an international trade expert.

Tariffs create higher input costs for other industries, making them "vulnerable" to foreign competition, Cox wrote in a paper titled "The Long-Term Impact of Steel Tariffs on U.S. Manufacturing" published in 2022.

These spillover effects hurt other sectors of the economy, ultimately costing jobs, economists said.