TRUMP’S TARIFF WAR VERSUS THE WTO’S MULTILATERAL TRADING SYSTEM: TOWARDS GLOBAL LAWLESSNESS?
DOI:
https://doi.org/10.31436/iiumlj.v33i2.1090Keywords:
Tariff War, Bound Tariff, WTO, Most-Favoured-Nation Principle, Rules-Based Trading SystemAbstract
The World Trade Organisation’s multilateral trading system has been pivotal to the development of stable, fair, and robust international trade, free from discrimination and protectionism. However, the protectionist policies advanced under Trump’s “America First” agenda, particularly the imposition of unilateral tariffs, threaten to dismantle this carefully constructed global framework. The world has witnessed an alarming economic confrontation between the United States and China, the two economic powerhouses, marked by dramatic tariff escalations reaching as high as 145% and 125%, respectively. The ripple effects have been profound: global trade volumes have contracted, supply chains have been severely disrupted, and global value chains have undergone a rapid and inefficient realignment, resulting in a less transparent and more fragmented international trade system. This study aims to assess the extent of damage inflicted on the WTO’s multilateral trading system. Adopting a primarily doctrinal legal methodology, the research critically examines relevant WTO Agreements alongside decisions of the WTO Panels and Appellate Body that have been compromised by the tariff war. A supplementary quantitative analysis compares the WTO-bound tariff rates with those imposed by the Trump administration. The findings indicate that the United States’ unilateral tariff hikes constitute clear violations of core WTO commitments—most notably, the prohibition against exceeding bound tariffs (capped at 3.4% for the U.S.) and non-discrimination enshrined in the most-favoured-nation (MFN) principle. This tariff conflict has severely undermined the WTO’s rules-based system, posing the risk of a descent into trade anarchy and economic dominance by powerful States. The paper concludes with recommendations aimed at mitigating the damage and restoring the integrity of the multilateral trading framework.
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