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Global Times: Upholding the right path of multilateralism, defending the international trade order

2025-04-25

President Xi Jinping, when meeting with representatives of the international business community, emphasized: "Multilateralism is the only choice for addressing global challenges, and economic globalization is an unstoppable trend of history. China upholds true multilateralism, promotes universally beneficial and inclusive economic globalization, actively participates in global economic governance, and is committed to building an open world economy."

Recently, the US announced to impose so-called reciprocal tariffs on its global trading partners, with a particularly intensified escalation of tariffs on Chinese goods. On April 9, China's State Council Information Office released a white paper titled "China's Position on Some Issues Concerning China-US Economic and Trade Relations," clearly stating that the US imposition of these "reciprocal tariffs" "damage its own and others' interests," while also emphasizing that "China and the US can resolve differences in economic and trade areas through equal-footed dialogue and mutually beneficial cooperation."

In response to the US tariff bullying, many countries have expressed shock and indignation. Even within the US, there has been a significant outcry, including lawsuits filed in federal courts accusing the US government of abusing the International Emergency Economic Powers Act (IEEPA). These lawsuits argue that the administration has blatantly violated the constitutional principle that the power of taxation belongs to Congress, and raise serious concerns about procedural illegality and abuse of power.

Such tariff bullying reveals the true face of the current US government: In pursuit of narrow political self-interest, it is willing to trample on the international trade order, even at the risk of violating its own constitution and laws.

In stark contrast, China has adhered to equal dialogue and lawful countermeasures in the face of the US breach of its tariff concession obligations and most-favored-nation (MFH) clauses under the WTO, as well as its unilateral maximum-pressure tactics. In doing so, China not only firmly safeguards its sovereignty and development interests but also sets an example in defending the multilateral trading system, demonstrating its sense of responsibility as a major country.

Unconstitutional overreach reveals structural crisis in US governance

Section 8 of Article I of the US Constitution explicitly grants Congress the "power to lay and collect taxes, duties, imposts and excises." This clearly assigns the authority to levy tariffs, a form of taxation, to Congress rather than the president. However, the US administration, using the IEEPA as a pretext, has signed multiple executive orders in a short period imposing punitive tariffs on China, Mexico, Canada and other trading partners. These actions, taken without congressional authorization, likely constitute an unconstitutional usurpation of power vested exclusively in Congress. By invoking a "national emergency" to justify trade protectionism, the executive branch has completely overstepped constitutional limits on its authority.

From the perspective of US practice, since its enactment in 1977, the IEEPA has never been used to impose tariffs. The act grants the president powers to investigate, regulate or prohibit, under such rules and regulations as he may prescribe, by means of licenses or otherwise, any transactions in foreign exchange, but the word "tariff" does not appear in the statute. Legislative records from the time of the IEEPA's reform explicitly state that emergency powers may be exercised "to deal with any unusual and extraordinary threat." Yet the so-called emergency cited by the current US administration merely concerns long-standing, normal economic issues such as trade deficits and industrial hollowing-out. Packaging ordinary economic problems as a national emergency grossly distorts the legislative intent and represents a blatant violation of the constitutional principle of separation of powers that the US claims to uphold.

From the perspective of procedural justice, the US National Emergency Act requires that the president's authority "must stem either from an act of Congress or from the Constitution itself." Because Article II of the Constitution does not grant the Executive general emergency powers, the president generally must rely on Congress for such authority. However, in reality, the current government has failed to fulfill its statutory consultation obligations before issuing tariff orders and frequently modified the applicable tariff scope, leading to a policy that appears erratic and capricious. Such arbitrary decision-making that takes effect immediately not only causes severe turbulence in the US capital markets, but also exposes the institutional risk of executive power surpassing the rule of law.

Trampling on WTO rules undermines the foundation of global economic governance

Unilateral tariff policies not only tear apart the order of US domestic law, but also push the multilateral trading system to the brink of collapse. In 2020, a WTO panel ruled that Trump administration tariffs on $200 billion worth of Chinese goods are illegal. The use of the IEEPA to escalate the tariff war reveals its illegality in three regards.

It violates the WTO's MFN principle. Article 1 of the General Agreement on Tariffs and Trade 1994 (GATT) explicitly requires that any advantage, favor, privilege or immunity granted by any contracting party to any product originating in or destined for any other country shall be accorded immediately and unconditionally to the like product originating in or destined for the territories of all other contracting parties. However, the so-called reciprocal tariffs applied by the US are a typical discriminatory practice. This policy of tying trade measures to geopolitical considerations contravenes the MFN principle and directly undermines the cornerstone of the multilateral trading system.

It violates commitments regarding tariff constraints and tariff reduction obligations. The average bound tariff rate that the US committed to other WTO members is 3.4 percent. On April 9 local time, the US government announced that the tariff rate on Chinese imports would be raised to 125 percent, far exceeding its commitments. This not only violates the tariff reduction obligations but also serves as a dangerous example of "domestic law surpassing international commitments."

It constitutes an abuse of the security exception clause. The GATT permits a member to take "any action" that"it considers necessary for the protection of its essential security interests."However, this clause has never been interpreted to cover ordinary commodity trade. The US government has classified issues that traditionally belong to the realm of ordinary commodity trade as "national security threats." For instance, when imposing tariffs on steel and aluminum products, the stated reason was to "protect domestic industries" and maintain defense capabilities, yet only about 3 percent of the steel imported is used for defense-related production. This act of equating economic competition between the US and other countries in the context of ordinary commodity trade with national security clearly exceeds the legislative intent of the security exception clause. Imposing high tariffs under the guise of "national security" is merely a pretext for exercising trade protectionism.

China's rational countermeasures reflect its sense of responsibility as a major country

In the face of trade bullying initiated by the US, China has consistently adhered to international law as its standard and used the rules of the WTO as its weapon, implementing precise and moderate countermeasures to make significant contributions to the maintenance of the multilateral trade system. In this round of the tariff war launched by the US, China's countermeasures have remained relatively restrained, limited to the trade sector, demonstrating the stability and strategic foresight of a major global power.

In terms of response strategies, China has strictly followed the principle of proportionality. Since 2018, China has kept its counter-tariffs on US goods within a limited scope, refraining from resorting to the extreme measures of "broad-based tariffs,"which are typical US actions. In response to the latest provocations from the US, China has raised tariffs on US goods to 125 percent, but has maintained a cautious restraint, starkly contrasting with the unreasonable approach of "all-out war" from the US side.

In terms of legal preparedness, China has actively engaged with the multilateral dispute resolution mechanisms. Since 2018, China has lodged complaints against the US in the WTO, striving to use the WTO rules as a weapon to curb the spread of unilateralism. In the case regarding the Section 301 tariffs (DS543), the panel ruled that the additional tariffs imposed by the US on Chinese imports violated the MFN principle and exceeded the US' bound tariff rates. On April 8, Eastern US time, in response to the arbitrary imposition of so-called reciprocal tariffs, China once again requested WTO dispute consultations, citing the serious violations of WTO rules by the US and the significant harm caused to the legitimate rights and interests of WTO members. This practice of "confronting hegemonic power with rules" serves as an example for countries to uphold the rule of international law and defend the multilateral trading system during a critical moment when global trade is facing its greatest crisis.

In the face of "America First" and the trade protectionist policy of the so-called reciprocal tariffs, China has continued to improve its institutional mechanism for a high-level opening-up, adhering to the principle of opening up to promote reforms and establishing new systems for a higher-level open economy. Not long ago, the State Council announced that China will expand its comprehensive pilot programs to more cities to accelerate the opening up of the service sector. Efforts should be made to expand voluntary opening up in an orderly manner, tap into the potential of China's supersized market, promote high-quality development of the service sector and contribute to building new institutions for a higher-standard open economy, according to the State Council. This kind of open-mindedness against the trend is a historic departure from the US regression of "building walls and creating barriers."

The tide of history is unstoppable, and win-win cooperation is the right way

Since April 2025, a number of US small businesses have jointly sued the US government in the US Court of International Trade, arguing that the government does not have the authority to announce comprehensive tariff increases without congressional approval, and requesting that the government be prevented from implementing tariffs under the IEEPA. The latest Global Trade Outlook and Statistics report released by the WTO on April 16 makes it clear that "reciprocal tariffs" by the US are one of the risks that could lead to a steeper decline in world trade. The tariffs have already caused unprecedented volatility in the global shipping industry, sending a warning that any politicization of economic and trade issues and abuse of tariffs will hurt others as well as the US itself.

In a meeting with representatives of the international business community, President Xi said that China is committed to the fundamental national policy of opening up to the world, and is advancing high-standard opening up and taking solid steps to expand institutional opening up, such as that of rules, regulations, management and standards. China's door will only open wider, and the policy of welcoming foreign investment has not changed and will not change, he said.

As the world undergoes faster transformation unseen in a century, China insists on opening up rather than closing up, on inclusion rather than exclusion, on integration rather than decoupling, injecting certainty into an uncertain world. The wisdom of the East has always shone with the light of shared destiny through actions, ranging from signing the Regional Comprehensive Economic Partnership agreement to joining the world's largest free trade zone, taking the initiative to align its policies with high-standard international economic and trade rules, and pursuing high-quality Belt and Road cooperation around connectivity to create a new platform for international economic cooperation.

At present, the US government is addicted to the illusion of waving its "tariff stick," but in reality, it is caught in a "prisoner's dilemma" and does not know it. Historical experience has repeatedly proven that any "tariff stick" that overrides international rules will eventually fail under the test of the spirit of the rule of law and the laws of the market. In fact, as a result of Washington's unpredictable policies and abuse of tariffs, the US has not only lost its national image, but the US government has also lost its credibility. Only by adhering to the spirit of the international rule of law and upholding the multilateral trading system can all countries cut through the fog and move toward a tomorrow of common prosperity.

Today's China has both the firm will to defend its core interests and the breadth of mind to deepen reform and opening-up. We firmly believe that as long as the international community jointly adheres to multilateralism, we will be able to break through the fog of protectionism and usher in a bright future for global economic recovery.

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