Trump’s tariff war violates regulations
(MENAFN) President Donald Trump’s latest tariff policies raise crucial questions about the future of global trade and the United States' relationship with the World Trade Organization (WTO). The US has not only breached its WTO commitments by imposing sweeping tariffs but has also made it clear that it no longer feels bound by international trade law. By bypassing the WTO’s existing processes for emergency tariff hikes, the US is signaling that it may either push for reforms within the organization or continue on a path of unilateral action, challenging multilateral rules.
The WTO relies on moral pressure and retaliatory measures to enforce compliance, but these tools are ineffective against a powerful economy like the US. Retaliation, which could take years to resolve under current WTO procedures, is complicated further by the US blockade of the WTO Appellate Body. Without resolution mechanisms, other countries’ retaliatory measures would also violate WTO rules, creating a standoff.
While the WTO cannot expel the US, it could explore alternative arrangements that allow global trade to function without American participation. Though the US has not formally withdrawn, its disruptive actions suggest that it may no longer prioritize multilateral trade agreements. However, the US also still has substantial interests in global trade, particularly as it derives over 40% of its corporate profits from overseas.
In the absence of US leadership, some smaller countries may opt for bilateral agreements, offering tailored concessions to the US. Countries with minimal tariffs, such as Switzerland and Singapore, could find it easier to adjust to these changes, while non-tariff barriers may be revised to reduce protectionism.
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