Ross Says 'WTO Pincer' of MFN and Bound Tariff Rates Preventing 'Reciprocal Tariffs'
The combination of World Trade Organization rules for Most Favored Nation treatment and bound tariff rates leave the U.S. at a disadvantage within trade negotiations, Commerce Secretary Wilbur Ross said during a May 14 speech at the National Press Club. "We are now constrained by two sides of a WTO pincer," he said. The MFN, which requires level tariff rates for countries the U.S. doesn't have free trade agreements with, and bound tariff rates, the ceiling on allowed tariff levels, "prevent us from having reciprocal tariffs because, in most cases, our bound rate ceiling is at or near our very low MFN applied rate, while other nations have higher levels of both." President Donald Trump has mentioned the possibility of implementing a "reciprocal tax."
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Ross, who noted a wide gap remains between the U.S. and China on trade negotiations, also downplayed concerns for Section 301 tariffs and subsequent responses from China. "I hope that we can make a fair deal. But if that does not happen, a trade tit-for-tat will not be economically life-threatening to the United States," he said in the speech. Ross also complained of China's "non-tariff barriers" that are "non-science-based" restrictions that "essentially are tailored to keep U.S. goods out."