US president Donald Trump has not only disrupted global trade, but also much of the rule-based global order. The way Trump has been recklessly taking decisions may render the United Nations and its affiliated organisations completely paralysed in due course of time. He has already taken the US out of the WHO. His administration has also stopped funding various global aid programmes.
Trump is in the process of shrinking the US into “global isolation” under the pretext of ‘America for Americans’. His domestic approval ratings may be up right now, but very soon, as the tariff pressure builds up, there will either be a shortage of goods or these will become costlier. It is eventually the consumer who ends up paying the tariffs. The burden is passed on to the consumer in the end.
Trump is defying the basic principle of demand and supply. Presidents and policymakers before Trump in the US obviously were not ‘economic illiterates’. If imported goods cost less than those manufactured at home, you will naturally prefer the imported ones. Once you impose tariffs, you only raise the input costs. That is the basic economic principle. Tariffs on imports actually penalise your own domestic consumers, either by denying them the imported products or making these more costly.
By imposing arbitrary and unilateral tariffs, Trump is undermining the World Trade Organisation (WTO) regime. It evolved for a reason. Prior to that, there was the General Agreement on Tariffs and Trade (GATT). These were all measures and steps taken in the direction of streamlining global trade, besides bringing in balance and providing a level playing field to countries which had been left out in terms of economic progress.
The main aim and purpose of the WTO was to promote “free and fair” international trade by enforcing global trade rules and removing trade barriers. Tariffs are considered and acknowledged to be the worst trade barriers, which Trump is resorting to. One of the main purposes was to help developing countries benefit from the global trading system. To some extent, it did benefit developing economies at the cost of developed economies, but the latter did not feel the impact.
It is interesting that only the United States, and that too under Donald Trump, has decided to virtually violate the WTO rules and guidelines. There are other countries in the world that are part of the WTO regime. Even in the US prior to Trump, none of the Presidents resorted to punitive tariffs, which is something only someone with a raw and crude understanding of global economics can resort to. Trump is doing everything that the WTO stands against like discriminatory trade practices. He is openly threatening companies to move their manufacturing to the US and stop hiring people from other countries like India.
While the tariffs will certainly isolate the US economically, Trump has also taken other decisions that, in the long term, will leave the US by itself. One of the first and major executive orders Trump signed, on January 20, 2025, immediately after taking the oath for his second term, was to withdraw the United States from the World Health Organisation. The final withdrawal will come into effect in January 2026, as there is a mandatory one-year notice period. Here again,
Trump cited unconvincing reasons for withdrawal, such as the WHO’s failure to handle COVID-19 and the growing Chinese influence on the organisation.
Besides, Trump has withdrawn the US from the United Nations Educational, Scientific and Cultural Organisation (UNESCO), the United Nations Human Rights Council (UNHRC), and the UN Relief and Works Agency for Palestinian Refugees (UNRWA).
Trump has violated various articles and provisions of the WTO and GATT, which forbid members from raising tariffs and duties beyond agreed limits and ceilings. By imposing tariffs on individual countries, the US under Trump is violating the uniformity clause of GATT, which calls for treating all WTO members uniformly. Trump, by resorting to bilateralism, is simply violating the principle of multilateralism, which is the basic foundation of the WTO regime.
The European Union, China, Canada, and Brazil have urged the WTO to hold fresh deliberations and consultations over the US tariffs imposed by Trump. China and Brazil have also lodged formal complaints against the US in the WTO following the imposition of tariffs.
Trump’s crude and raw understanding and implementation of economic and financial rules, if they can be called so, will in the long term harm the US more than those countries on which he has imposed the tariffs. Theoretically, he may sound like a great patriot keen to make ‘America Great Again’, but practically and in the long term, he will end up taking America back by decades.
Follow us
