President Donald Trump has a way with words. America’s federal income tax department is called Internal Revenue Service. Trump says he will build an External Revenue Service. It is an appealing concept. Instead of burdening U.S. taxpayers, he proposes to tax outsiders.

He says America is one of the most open consumer markets in the world, with access given to all exporting countries. But those exporting countries often have high tariff walls protecting their domestic markets. He says that is unfair to America’s exporters.

Hence, he has proposed to raise import tariffs to match the exporting country’s tariffs. It’s a tit for tat strategy, which he claims will raise much revenue for America, and punish those who keep their domestic markets protected. Never mind that the WTO rules do not allow America to selectively differentiate import tariffs for the same product from different origins. This is called the MFN rule.

Never mind that raising import tariffs will hurt the American consumer, since it will raise prices and hence inflation. Trump counters that by saying he will cut income tax, which is not feasible given the huge size of the fiscal deficit.

Never mind that the reason developing countries like India were allowed to have higher import tariffs than countries like the U.S.A. was to compensate their domestic industries for domestic handicaps like high cost of power, infrastructure, credit, and lower labour productivity.

This was all a part of the grand design of the World Trade Organisation (WTO) to get all on board. India, and many other developing countries, have enjoyed a special and........

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