A trade war means back to the beginning

A trade war is increasingly becoming a reality. Even after the United States announced it would raise tariffs on its steel and aluminum imports in March this year, there were hopes that negotiations might help stall the additional tariffs. Unfortunately, such hopes didn't materialize.

US trade actions have begun evoking retaliatory actions from various economies. And a full-blown trade war now seems all but imminent.

Countries are free to choose the way they treat their imports. The World Trade Organization has pursued a multilateral program of phased tariff liberalization by urging its members to treat each other as MFNs (most favored nations) and imposing same tariffs on identical imports from all members.