President Donald J. Trump entered his second term determined to dramatically reshape United States trade policy. In his inaugural address, he vowed to “immediately begin the overhaul of our trade system,”Footnote 1 and on his first day in office the administration released a memorandum directing multiple federal departments and the Office of the U.S. Trade Representative (USTR) to “investigate the causes of our country’s large and persistent annual trade deficits in goods, as well as the economic and national security implications and risks resulting from such deficits, and recommend appropriate measures, such as a global supplemental tariff or other policies, to remedy such deficits.”Footnote 2 These actions marked the opening salvo of the most tumultuous six months in the post-World War II history of American trade policy. During this period, the United States introduced wave upon wave of new tariffs—nearly all of which violated World Trade Organization (WTO) commitments—and subsequently undertook an unprecedentedly rapid negotiation of trade “deals” that were fundamentally unlike traditional trade agreements and themselves violate core WTO principles. This essay provides a synoptic overview of the many tariffs formally announced (leaving aside others that were informally threatened), before considering the responses of other states, the negotiation of the new trade deals, and the implications of these actions for the future of international economic law and institutions. Throughout, our focus is on the international law aspects of U.S. actions; a companion entry explores the domestic law issues raised by President Trump’s tariffs.Footnote 3
New U.S. Tariffs
Almost immediately after the start of President Trump’s second administration, the U.S. undertook the serial imposition of a wide range of new tariffs in its first six months (summarized in Table 1). For current purposes, we divide these new U.S. tariffs into five categories: (1) “fentanyl-border emergency” tariffs imposed on Canadian, Mexican, and Chinese imports; (2) Section 232 “national security” tariffs imposed on steel, aluminum, automobiles, and copper; (3) “secondary tariffs” on countries importing Venezuelan or Russian oil; (4) “national emergency” tariffs launched against Brazil; and (5) a set of new “baseline” and “reciprocal” tariffs announced on “Liberation Day,” April 2, 2025 and revised in late July.Footnote 4
Major U.S. Tariff Actions, Jan. 20–Aug. 15, 2025.
First, invoking the International Emergency Economic Powers Act (IEEPA), President Trump on February 1, 2025, issued three companion orders targeting China, Mexico, and Canada with respect to a putative national emergency concerning fentanyl, drug trafficking, and illegal immigration across the southern and northern U.S. borders.Footnote 5 These orders imposed a 10 percent tariff on goods from China;Footnote 6 a 25 percent tariff on imports from Mexico;Footnote 7 and a 25 percent duty on Canadian imports (with the exception of energy imports, taxed at 10 percent).Footnote 8 Each order contained language providing that, should the targeted country retaliate against U.S. tariffs, “the President may increase or expand in scope the duties imposed under this Executive Order,” threatening escalation against states that dared to retaliate while offering the possibility of tariff reductions for states that accepted U.S. demands.Footnote 9 Tellingly, the White House stated that, “Tariffs are a powerful, proven source of leverage for protecting the national interest. President Trump is using the tools at hand and taking decisive action that puts Americans’ safety and our national security first.”Footnote 10 The notion that access to American markets is an important source of leverage that the United States should and would use to achieve both its trade and non-trade policy objectives represents a hallmark of Trump’s second-term tariffs.
Beijing retaliated by imposing tariffs of 10–15 percent on a variety of U.S. goods.Footnote 11 President Trump responded on March 2 by doubling the China tariff to 20 percent.Footnote 12 Mexico and Canada, by contrast, pledged cooperation on fentanyl controls, and the United States responded by delaying the introduction of the new tariffs for thirty days. When negotiations stalled, however, the White House re-issued the measures on March 2, setting March 7 as the new start date and limiting coverage to goods not covered by the United States-Mexico-Canada Agreement (USMCA).Footnote 13
A second major category of tariffs falls under the rubric of “national security” tariffs adopted under Section 232 of the Trade Expansion Act of 1962. While previous presidents invoked Section 232 rarely and selectively, the first Trump administration set an important precedent by invoking Section 232 to impose 25 percent tariffs on steel and 10 percent on aluminum imports. President Joseph R. Biden, Jr. left these tariffs in force, but negotiated a series of tariff-rate-quota (TRQ) exceptions for selected trading partners.Footnote 14 On February 10, in a pair of executive proclamations, President Trump nullified these exceptions and re-imposed global steel tariffs of 25 percent, while raising aluminum tariffs from 10 to 25 percent;Footnote 15 he subsequently raised those global tariffs to 50 percent.Footnote 16
President Trump also announced 25 percent automobile tariffs to take effect on April 3 with auto parts tariffs implemented from May 3, again invoking national security grounds.Footnote 17 Vehicles and parts that qualify for USMCA rules of origin are not exempt, but the proclamation lets importers apply the 25 percent duty only to the non-U.S. content.Footnote 18
Beyond steel, aluminum, and automobiles, all of which were based on investigations launched during President Trump’s first term, the second Trump administration opened nine new Section 232 investigations, assessing threats to national security from the import of copper;Footnote 19 timber and lumber;Footnote 20 semiconductors;Footnote 21 pharmaceuticals;Footnote 22 critical minerals;Footnote 23 medium- and heavy-duty trucks and parts;Footnote 24 commercial aircraft, jet engines, and parts;Footnote 25 unmanned aerial systems (drones) and components;Footnote 26 and polysilicon and its derivatives.Footnote 27 By late July, only the copper investigation had concluded, with the White House announcing that 50 percent tariffs would be imposed on imports of various copper products;Footnote 28 the other eight investigations remained open, introducing dramatic uncertainty about the possible imposition of punitive U.S. tariffs on broad swaths of the global economy.
A third, and innovative, group of tariffs were authorized under the rubric of “secondary tariffs.”Footnote 29 A March 24 executive order proclaimed that, as of April 2, at the discretion of the secretary of state, “a tariff of 25 percent may be imposed on all goods imported into the United States from any country that imports Venezuelan oil, whether directly from Venezuela or indirectly through third parties.”Footnote 30 This policy represents a variation on the long-time practice of “secondary sanctions,” which generally take the form of financial penalties applied against specific entities (such as individuals or firms) doing business with the target of a primary sanction. “Secondary tariffs,” in contrast, involve the application of tariffs against all goods from specified states in response to interactions with the primary sanction target.Footnote 31 Although the secretary of state had not, as of August 2025, recommended tariffs against any state for importing Venezuelan oil, the authorization of secondary tariffs appears to be intended as a deterrent threat aimed at countries that have purchased crude oil, directly or indirectly, from Venezuela. President Trump also threatened to impose secondary tariffs on countries that purchase oil from Russia and Iran if those countries did not agree to U.S. demands with respect to the war in Ukraine and the Iranian nuclear program.Footnote 32 In early August, he acted on this threat, imposing a 25 percent tariff on India (but not China or any other country) for importing Russian oil.Footnote 33
A fourth and related set of tariffs came on July 30, when President Trump issued a new national emergency order titled “Addressing Threats to the United States by the Government of Brazil” that imposed an additional 40 percent tariff on approximately half of all Brazilian exports.Footnote 34 The purported national emergency centered on the actions of Supreme Court Justice Alexandre de Moraes, accusing him of abusing judicial authority, including and especially through the prosecution of former President (and Trump ally) Jair Bolsonaro, which the order characterizes as political persecution.Footnote 35 The use of tariff policy to influence domestic legal proceedings in a foreign country underscored the new administration’s willingness to use trade measures to address non-trade issues, and to stretch the meaning of “national emergency” far beyond their usual invocation under IEEPA and the National Emergencies Act.
Fifth, and most consequentially, the Trump administration prepared and implemented a wide-ranging global tariff plan, which would culminate in the “Liberation Day” tariff announcement of April 2, 2025. Preparations began several months earlier when President Trump publicly announced plans to impose “reciprocal tariffs” on all countries that maintain trade barriers against the United States.Footnote 36 President Trump’s Liberation Day pronouncement had several components. First, it imposed a 10 percent “baseline,” across-the-board tariff on imports from all trading partners regardless of their tariff or non-tariff barriers.Footnote 37 Second, it imposed individualized “reciprocal” tariff rates on goods from U.S. trading partners, ostensibly based on each partner’s tariffs and non-tariff barriers to trade but actually calculated on the basis of that country’s goods trade surplus with the United States.Footnote 38 Under this system, imports from fifty-seven economies would be subject to “reciprocal” tariffs ranging from 11 percent to 50 percent, including 20 percent for the European Union (EU), 24 percent for Japan, 25 percent for South Korea, 34 percent for China, and 46 percent for Vietnam.Footnote 39 Third, the executive order announcing the tariffs provides the president “modification authority” to adjust tariffs downward or upward, a provision designed to provide trading partners with an incentive to reach bilateral trade deals and a disincentive to impose retaliatory tariffs on U.S. goods.
The response to the Liberation Day announcement was swift and dramatic, triggering one of the steepest stock-market declines in history.Footnote 40 In response, on April 9, the White House suspended the country-specific “reciprocal” tariffs for ninety days (while retaining the 10 percent baseline tariff for most partners) to allow trade negotiations to proceed.Footnote 41 As that deadline approached, the United States extended the pause until August 1,Footnote 42 while simultaneously issuing a series of letters to major U.S. trading partners threatening punitive new tariffs should negotiations fail.Footnote 43
Finally, following several months of intense negotiations summarized below, the president issued, on July 31, a new executive order “Further Modifying the Reciprocal Tariff Rates,” which institutionalized new “reciprocal” tariffs of between 10 percent and 41 percent for sixty-nine U.S. trading partners, to take effect on August 7.Footnote 44 These tariffs were generally lower than the Liberation Day rates but dramatically higher than the status quo ante, including 20 percent for Taiwan, 25 percent for India (with the additional 25 percent secondary tariffs stacked on top), 30 percent for South Africa, and 39 percent for Switzerland. Trade partners that had signed deals with the United States in the interim (the EU, Indonesia, Japan, South Korea, the United Kingdom, and Vietnam) received tariffs of between 10 and 20 percent, while countries not specifically named were assigned a baseline 10 percent tariff. In addition, the order provides that any “article determined by CBP to have been transshipped to evade applicable duties” would be subject to a 40 percent tariff, leaving that determination to the United States.Footnote 45 On the same date, by a separate order, the White House announced the raising of punitive tariffs against Canada to 35 percent.Footnote 46
Taken together, these tariffs constituted a dramatic alteration of United States trade policy, raising the average effective U.S. tariff rate consumers face by nearly eight-fold, from approximately 2.4 percent in January to 18.6 percent in early August—the highest since 1933.Footnote 47 Beyond the numbers, these tariffs underscored the administration’s willingness to stretch presidential tariff authority under existing U.S. laws, weaponize trade policy for non-trade objectives, and engage in systematic violations of U.S. commitments under the multilateral trading system.
Foreign Responses
The stream of tariff announcements triggered diverse responses from U.S. trading partners. First, a small number of states imposed retaliatory tariffs on U.S. goods. China represents the most dramatic example of this strategy. As discussed in more detail in Professor Gao’s contribution, the two sides engaged in a tit-for-tat escalatory tariff spiral, with U.S. tariffs on Chinese goods eventually reaching 145 percent and Chinese duties on U.S. goods peaking at 125 percent.Footnote 48 In May, following two days of talks, the two sides announced that each had agreed to reduce tariffs on goods from the other by 115 percent pending further negotiations, reversing much but not all of each side’s tariff increases.Footnote 49
Canada also announced retaliatory tariffs. In response to the “fentanyl tariffs,” Canada imposed 25 percent tariffs on $20.8 billion of U.S. exports, effective on March 4, and 25 percent tariffs on $86.7 billion of U.S. exports effective on March 23.Footnote 50 In response to the steel and aluminum tariffs, Canada imposed a 25 percent tariff on $20.7 billion of U.S. exports effective March 13.Footnote 51 On April 3, the day after the U.S. announced a 25 percent tariff on Canadian automobiles, Canada imposed a 25 percent tariff on U.S. autos, effective April 9.Footnote 52
A larger number of trading partners, including Brazil, the EU, India, Japan, Ivory Coast, and the United Kingdom (UK), threatened retaliation, most commonly by threatening to raise tariffs once the new U.S. tariff rates came into effect. Some states did so via legislation. For example, in April, Brazil adopted the Economic Reciprocity Law, which authorizes responses to “unilateral measures” that “negatively impact Brazil’s international competitiveness.”Footnote 53 Other states used WTO processes to announce their plans. Between May 9 and May 12, India, Japan and the UK all notified the WTO of their intent to “suspend concessions,” that is, raise tariffs, in response to U.S. tariffs on steel, aluminum, automobiles and auto parts.Footnote 54 The EU, for its part, repeatedly drew up lists of retaliatory tariffs while postponing their application pending ongoing negotiations with the United States.Footnote 55
Many states adopted hedging strategies, developing or expanding ties with other economic partners to reduce reliance on the United States. India, for example, concluded a trade agreement with the UK, while the EU concluded long-stalled agreements with Mercosur, Mexico, and the UK, and proposed “structured cooperation” with the parties to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.Footnote 56 China announced a willingness to extend duty-free treatment to imports from fifty-three African nations,Footnote 57 a policy surely designed to draw a sharp contrast with the sharp rise in U.S. tariffs.
Other states sought to deescalate trade tensions, including through unilateral decisions to remove trade barriers in an effort to preempt U.S. tariffs. For example, Israel removed all tariffs on U.S. goods and announced that it would eliminate the U.S.’s trade deficit with the country.Footnote 58 These announcements did not, however, induce President Trump to rescind tariffs on Israeli goods. In June, after the president announced that he was “terminating ALL discussions on Trade with Canada,” Canada rescinded a digital services tax, a decision intended to “support a resumption of negotiations.”Footnote 59 Australia sought to deescalate by ruling out the imposition of retaliatory tariffs.
A number of states engaged in direct bilateral negotiations in an effort to delay, reduce, or eliminate threatened U.S. tariffs. In the case of China, these took the form of short-term agreements designed to deescalate the dispute, rather than a long-term settlement to it. As noted above, in May the two sides agreed to reduce the tariffs on goods from their April heights for ninety days pending a definitive settlement to the dispute. The following month, the two states reached a second agreement, in which China agreed to liberalize the export of rare earth minerals to the United States, and the United States agreed to loosen some export restrictions on China.Footnote 60 Nevertheless, the May cease-fire agreement was scheduled to expire on August 12, with the two sides meeting frequently in July but failing to conclude a deal.Footnote 61 On August 11, the United States announced another ninety-day extension, until November 12, 2025.Footnote 62
By contrast with the short-term agreements reached with China, the six other “deals” agreed between the United States and Indonesia, the EU, Japan, South Korea, the UK, and Vietnam represented preliminary but supposedly more stable settlements.
On May 8, the United States reached a preliminary agreement with the UK.Footnote 63 As part of this agreement, the United States agreed to duty-free access for British aircraft engines and parts, and reduced the tariffs on UK automobiles from 27.5 percent to 10 percent, for up to 100,000 autos annually.Footnote 64 The United States also agreed to establish in the future a tariff-rate quota for aluminum and steel products; in the meantime tariffs on these products would drop from 50 percent to 25 percent. The UK, in turn, agreed to increase its tariff-free quota of U.S. ethanol and beef.Footnote 65 The UK accepted, with the exception of these few carve-outs, the imposition of the U.S. baseline tariff of 10 percent on all UK imports, while negotiations continued over the tariff treatment of pharmaceuticals and digital trade.
On July 2, the United States announced a deal with Vietnam. Although the text was not immediately released, reports stated that the United States will reduce tariffs on Vietnamese goods from the previously announced rate of 46 percent to 20 percent. Goods “transshipped” through Vietnam to the United States would face a 40 percent tariff, a provision widely understood to target China.Footnote 66 In exchange, Vietnam agreed to eliminate tariffs on virtually all U.S. imports.Footnote 67
On July 15, the United States announced a Framework for Negotiating an Agreement on Reciprocal Trade with Indonesia. Under this agreement, the United States will impose tariffs of 19 percent on Indonesian goods, a reduction from the 32 percent tariffs previously announced. In exchange, Indonesia will eliminate tariffs on virtually all U.S. imports. The parties also noted a series of “forthcoming commercial deals between U.S. and Indonesian companies,” including the purchase of $15 billion of U.S. energy products, $4.5 billion of agricultural goods, and fifty Boeing aircraft.Footnote 68
On July 22, the United States announced a trade deal with Japan. Under this agreement, the United States will impose tariffs of 15 percent on Japanese goods, a reduction from the 25 percent tariffs previously announced. In exchange, Japan agreed to liberalize its markets for increased imports of U.S. automobiles and rice, and to invest $550 billion in the United States.Footnote 69
On July 27, the United States and the EU reached a Cooperation Agreement on Reciprocal, Fair and Balanced Trade, pursuant to which the United States will impose 15 percent tariffs on imports of European goods, including cars, semiconductors, and pharmaceuticals, while leaving the 50 percent steel and aluminum duty unchanged.Footnote 70 In exchange, the EU committed to invest $600 billion in the United States and purchase $750 billion in U.S. energy and defense exports. The EU also pledged to eliminate many tariffs on U.S. industrial goods and to address non-tariff barriers on food, digital trade and supply-chain security.
On July 30, 2025, the United States and South Korea reached a preliminary agreement under which the United States will impose a 15 percent tariff on South Korean imports, while South Korea agreed to invest $350 billion in U.S. projects and to purchase $100 billion in U.S. energy products, with both sides indicating expanded access for American goods.Footnote 71
While the specific baseline tariff rates, concessions and carve-outs varied from agreement to agreement, and were in that sense “bespoke,” by the end of July a general template for these preliminary deals (excepting the U.S.-China agreement, which represents a temporary cease-fire) was emerging, with seven common elements. First, each U.S. trade partner accepts new U.S. baseline tariffs substantially higher than the status quo ante, though lower than the “reciprocal” tariffs threatened on April 2. Second, several deals offer limited carve-outs, typically in the form of tariff-rate quotas, for particular goods such as jet engines or automobiles, securing each partner’s agreement to the new U.S. baseline tariff while offering the partner a small relief valve for its most economically or politically important exports. Third, several agreements include anti-circumvention provisions, such as the 40 percent tariff on Chinese goods transshipped through Vietnam (which was then generalized to all U.S. trade partners in the July 31 reciprocal tariffs agreement). Fourth, most agreements feature pledges by U.S. trade partners to purchase substantial amounts of U.S. goods or to invest comparable sums in the United States, representing a striking commitment to managed trade in these new deals. Fifth, none of the preliminary agreements is intended to be legally binding; they lack third-party dispute settlement; and they do not preclude the United States from reverting unilaterally to the previously threatened tariffs. Sixth, all of the agreements are explicitly asymmetric, with U.S. trade partners accepting dramatic unilateral increases in U.S. tariffs, along with one-way commitments by trading partners to meet various U.S. demands. Seventh, all of these deals, rather than rectifying U.S. violations of WTO law, actually compound those violations, coercing U.S. trade partners to become complicit in the violation of General Agreement on Tariffs and Trade’s (GATT) fundamental, most-favored nation principle. With additional trade deals under negotiation with Canada, Mexico, India, and others as of August 2025, it seemed likely that any future deals would incorporate these core elements.
Interestingly, but perhaps not surprisingly given the paralysis of the WTO Appellate Body and the demonstrated willingness of the United States to appeal panel decisions “into the void,” the initiation of dispute settlement proceedings at the WTO has been rare. To date, only China, Canada, and Brazil have pursued this path. Specifically, China requested consultations with the United States, the first step in WTO dispute settlement, with respect to the imposition of 10 percent tariffs on Chinese goods,Footnote 72 the subsequent increase in tariffs to 20 percent,Footnote 73 and the “Liberation Day” tariffs imposed upon Chinese goods.Footnote 74 In each request, China argued that the U.S. tariffs violated the most-favored nation (MFN) clause of GATT Article I.Footnote 75 China also claimed that the new U.S. tariffs were in excess of the maximum (“bound”) rates found in the U.S. tariff schedule, in violation of GATT Article II.
Canada requested consultations with the United States with respect to the fentanyl tariffs,Footnote 76 steel and aluminum tariffs,Footnote 77 and duties on automobiles and auto parts.Footnote 78 In its requests, Canada claimed that the U.S. tariffs violated Article I’s MFN clause and were in excess of the bound rates set out in the U.S. tariff schedule, among other claims.
Brazil, in turn, formally requested consultations with the United States at the WTO on August 6, 2025, challenging the “reciprocal” and “national emergency” tariffs, which together imposed up to 50 percent duties on a wide range of Brazilian imports, as inconsistent with its GATT obligations (Articles I and II) and WTO dispute-settlement rules.Footnote 79
In each dispute, the United States responded that the tariffs were “relat[ed] to matters of national security” and that “issues of national security are political matters not susceptible to review or capable of resolution by WTO dispute settlement.”Footnote 80 Although the United States has long claimed that national security matters are not susceptible to review by WTO panels,Footnote 81 WTO panels have consistently rejected this position.Footnote 82 As of August 1, all of these disputes remain in the consultation stage; no dispute panels have been established, and no withdrawal or mutually agreed solution has been notified to the WTO.
Implications and Consequences
In one sense, the Trump administration’s trade policies represent an expansion of trajectories already embedded in U.S. trade policy, particularly the move away from support for further trade liberalization that began with the first Obama administration and accelerated during the first Trump administration and into the Biden administration. Yet in a much more significant sense, the new administration’s policy represents a dramatic departure from long-standing U.S. approaches to international trade.
The various U.S. actions described above represent a grave challenge to the multilateral trade system established, under U.S. leadership, in the aftermath of World War II. Over the ensuing seven decades that system has moved, slowly and unevenly, from a power-based order to a rules-based order. Yet the dramatic swings in U.S. trade policy during the first six months of President Trump’s second term are intended to—and do—challenge the very foundations of the multilateral trading system in three related, but distinguishable, ways.
First, one of the system’s central purposes is to produce “security and predictability” for producers, traders, and consumers.Footnote 83 Predictability, in turn, encourages capital investment and job creation. The rapid escalation of tariff rates, and sudden lowering or suspension of tariffs, have sparked chaos and confusion, deterring investment and undermining long-term planning by businesses and consumers. As Nicolas Lamp perceptively observes, by intentionally generating insecurity, “[t]he administration is thus not simply ignoring international trade law; it is deliberately undermining the very purpose that international trade law serves.”Footnote 84
Second, the WTO system is premised on foundational norms of universality and non-discrimination. Core WTO rules provide that states should not discriminate among trading partners, or between domestic and foreign products. The imposition of bespoke tariff rates on each trading partner represents the antithesis of nondiscrimination. Moreover, although the imposition of discriminatory tariffs weakens the multilateral trade system, it does not follow that the handful of framework agreements to reduce or unwind some of these tariffs strengthen it. To the contrary, these deals themselves violate basic WTO obligations. The provision in these deals of more favorable tariff treatment to some U.S. trading partners than others—such as tariff rates of 15 percent on goods from the EU and 20 percent on goods from Vietnam—violates GATT Article I’s most favored nation clause. In addition, the tariff rates in the preliminary agreements also violate GATT Article II, as they exceed the legally binding WTO tariff ceilings to which the United States previously committed. The hastily negotiated deals, moreover, find no refuge in GATT Article XXIV, which contemplates preferential trade agreements that eliminate duties “on substantially all the trade” between parties to the agreement.Footnote 85
Third, and perhaps most importantly, the president’s policies reject the foundational notion that increased trade is mutually beneficial. Liberalized trade rules enable states to specialize in goods and services that they can produce relatively more efficiently than their trading partners, promoting increased trade and greater aggregate welfare. President Trump’s tariff policy reflects a dramatically different view of trade. The assumption that states should seek the mutual reduction of trade barriers has been replaced by a notion that tariffs are a beneficial tool for rebuilding U.S. industry, protecting national security, raising revenue, and advancing geopolitical goals unrelated to trade, notwithstanding that these multiple goals are not entirely compatible. The president’s trade policy rejects the view of trade as a welfare-enhancing “win-win” enterprise in favor of one that understands trade as a zero-sum game. The U.S. administration has effectively scrapped the WTO’s principles of multilateralism, nondiscrimination, and market orientation for a more transactional approach that embraces managed trade and focuses on numerical outcomes.
This point can be put slightly differently. From time to time, previous U.S. administrations found themselves engaged in trade wars with specific states, such as Japan or China, or over goods in certain sectors, such as steel or autos. But rather than target certain goods from certain countries, the present Administration’s policies target virtually all goods from virtually all trading partners. And, while certain policies in earlier administrations violated GATT rules, no previous administration embraced an overarching trade policy that at its core rejected GATT disciplines. The novelty of these policies lies precisely in their rejection of WTO norms as a constraint on state action; the deliberate and systematic non-compliance with these rules is a dramatic departure from past U.S. actions. These policies constitute less a trade war than a war on the existing trade system. Whatever debates international lawyers have over whether and when certain forms of noncompliance can generate systemic benefits,Footnote 86 there should be no doubt that intentional massive noncompliance by the world’s largest economy—and efforts to cajole other states into noncompliance through bilateral trade deals—has already inflicted great harm on the multilateral trading system. On top of the long-standing breakdown of WTO negotiations and the neutering of the Appellate Body,Footnote 87 the Trump administration’s repudiation of the WTO’s core norms and underlying logic risks turning it into a “zombie international organization”—one that continues to exist, with regular meetings and professional staff, yet one that is decreasingly relevant to states’ actual trade policies.Footnote 88
At the same time, it is notable that the great majority of other states have not rushed to impose retaliatory tariffs; presumably they have absorbed the nearly century-old lesson that an escalating spirals of tit-for-tat tariffs, and the resulting collapse in trade volumes, can trigger unintended—and highly destructive—economic, political, and military consequences. Moreover, notwithstanding the handful of preliminary deals discussed above, other trading nations have not followed the United States in repudiating fundamental norms of international trade law or the WTO as a central organizing framework. Yet because U.S. policy and foreign responses are so unpredictable, the present crisis is still unfolding, and many future twists and turns are likely. For these reasons it is far too early to predict how the situation will eventually resolve.
It is entirely possible that in time other states will succumb to protectionist temptations, generating cascading retaliation as happened in the 1930s. Alternatively, trading nations may accelerate a pattern of liberalizing trade through a series of regional and bilateral agreements among themselves that emerge as the new focal points of trade governance. Pushed to an extreme, such efforts could ultimately lead to a small number of competing trade blocs. Perhaps less likely, a new multilateralism could emerge, led by some combination of Canada, China, the EU, India, Japan, Korea, the UK, and others.Footnote 89
In any case, the Trump administration’s tariff policies represent more than an assault on the economies of its trade partners, or an attack on the WTO system. By so clearly repudiating the multilateral trade system’s central rules and underlying logic, the president’s policies signal the conclusive end of the era of U.S. leadership of the global trade order. In an economically interdependent world, international trade will continue, even if the institutional form and underlying logic of the next trade system remain uncertain. More certain is that future generations will come to view the “Liberation Day” tariffs as signaling the “liberation” of the United States from the rules-based system that it did so much to create and sustain.
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