Srilanka, May 7 -- The United States' (US) proclamation of 'reciprocal tariffs' dealt a blow to the global trade system based on the World Trade Organisation principles. With the individualised tariff rates, the US has discarded non-discrimination in the Most-Favoured-Nation (MFN) tariff structure. The reciprocal tariff rate does not show any reciprocity but rather a calculation hypothesised to drive a bilateral trade deficit to zero.

Although the reciprocal tariff grabbed attention, the US trade policy under the second Trump administration is more complex. Section 232 of US Trade Expansion Act of 1962 is being used to target key sectors like steel, aluminium and auto parts. In addition, investigations are ongoing to determine tariffs ...