Has the time now come for countries, erstwhile allies and foes of the US alike, to unite in the Geneva corridors of the World Trade Organization (WTO) and in other appropriate forums against the tariff tantrums of President Trump and his loyalist henchmen?
Trump’s new global tariff war
With his “Liberation Day” tariff pause from April 9 now over, President Trump has once again begun unleashing even higher tariffs on some countries than the ones he had earlier unleashed on April 2, with even less economic logic if that is possible.
So far, in this new round which began on July 7, two days before his self-imposed deadline of July 9, President Trump first targeted and sent letters to Japan and the Republic of Korea, erstwhile allies, slapping both with 25% tariffs across the board on their exports to the US.
As of July 10, over 20 countries had received similar letters with many more to come in the next few days and weeks before end-July. Most viciously and cruel were the letters to Laos and Myanmar, amongst the poorest or conflict-ridden countries, who have been slapped with 40% tariffs, the highest so far. Canada was the latest country to get a letter with 35% tariffs on July 10. While some if not all countries can escape some of these tariffs if they capitulate to Trump’s demands in the next three weeks, these new tariffs will become effective on August 1, if they do not do so.
In addition, Mr Trump has also unilaterally levied 50% tariffs on US copper imports from August 1 on national security grounds and threatened Brazil with 50% tariffs across the board unless the judiciary in that country abandons the 2022 failed insurrection related trial of his soulless mate, previous Brazilian President Bolsonaro. This is personal, not economic policy related since this trial must be too close for comfort for Trump, given his supporters staged a similar, also failed insurrection on Capitol Hill in Washington DC on January 6, 2021.
President Trump has also threatened 10% additional tariffs on all BRICS members and partners on top of what he has already announced for them individually, or will announce for them, for example on India soon. He has said these additional tariffs will apply, with no exceptions on “any country aligning themselves with the Anti-American policies of BRICS.” This new tariff threat came immediately after the July 6 BRICS Rio de Janeiro Summit Statement.
The US President has also threatened tariffs as high as 200% on pharmaceutical imports into the US after a year or so unless pharmaceutical companies relocate to manufacture behind high US tariff walls. All these new tariffs are in addition to his earlier announced and already implemented tariffs of 25% on auto parts, aluminium and steel, and on China and other countries, which remain in place.
In addition, there is the Sanctioning Russia Act, 2025, introduced in the US Senate this April by Senator Lindsey Graham, a close political ally of Mr Trump, which the President now says he will seriously consider supporting. If approved, tariffs of 500% will be placed on countries like India, China and others which purchase Russian energy products.
If most or all of these tariffs go through on August 1, as now intimated, they will certainly put the global economy on a sure recession path, bringing back bad memories of the early 1930s when the spread of trade protectionism spurred by the US’ Smoot- Hawley Tariff Act exacerbated the Great Depression.
Violation of the WTOs Fundamental Principles and Mechanisms
Those familiar with WTO principles, rules and regulations will be aware that Mr Trump and his trade advisers have wilfully and repeatedly over the last few months violated both its most fundamental Most-Favoured Nation (MFN) principle as well as the hard-won most important agreement for developing countries: Special and Differential Treatment (S&DT). The MFN principle is a fundamental rule of the WTO which ensures that countries do not discriminate between their trading partners. If a WTO member grants favourable trading terms—like lower tariffs—to one country, it must extend the same benefits to all other WTO members.
S&DT in the WTO refers to provisions within WTO agreements that grant developing and least developed countries (LDCs) special rights and allow other members to treat them favourably. These provisions seek to help countries at early stages of development build up their agricultural, manufacturing and services industries through higher tariffs and non-tariff measures, also providing them with longer implementation periods to implement WTO agreements such as on intellectual property and public health (TRIPs) and technical assistance. Trump 2.0 has been both threatening and implementing a perverse and reverse S&DT. Countries such as Vietnam have agreed, under pressure and in panic, to provide zero-tariffs for all US exports to it, thereby also setting a bad example. India is under pressure to do the same given Trump’s repeated public pronouncements that India has agreed to zero import tariffs from the US, even if it has not yet done so.
In addition to the violation of these two fundamental principles as well as others, the US government over the last decade, beginning during Trump 1.0 and continuing through the Biden Administration and now Trump 2.0, has effectively disabled the WTOs Dispute Settlement Mechanism’s functioning and effectiveness. The international legal order governing trade can only be effective and sustainable, if countries face penalties for non-compliance. As a result of its making the WTO Appellate Body dysfunctional, the US has made it impossible to enforce global trade rules against either itself or other countries. Any country that loses a trade dispute can block the ruling by filing an appeal to the defunct body. In repeated disputes challenging its WTO-illegal trade policies, the US has been and continues to break global trade rules with impunity and without any punishment. This is truly unprecedented, unparalleled and unacceptable behaviour.
Strength in Unity
Countries committed to preserving a rules-based trading order should, in their own interest, collectively fight back within the WTO itself, punishing the US for its blatant violations of WTO rules. This should be led by China, the only country which has stood up so far, together with a thus far docile EU which accounts for 38% of global trade (as opposed to the US’ 10%). They should be backed by Canada, Brazil, the rest of the BRICS, and as many other WTO member states as possible.
While there is no clear-cut procedure to expel a WTO member, Article X sets out procedures for amending the WTO Agreement. The US could be suspended or even expelled by a two-thirds majority vote which amends the agreement to allow this. WTO members should take heart from the fact that Russia was expelled from the UN Human Rights Council after its illegal invasion of Ukraine in 2022 because of the use by the UN General Assembly of the UN Charter’s mandated “Uniting for Peace”.
Unprotected by the MFN principle, once expelled, the US would quickly lose access to global markets at favourable WTO tariff rates including for its services exports and protections for its intellectual property, both of which have been crucial to its economic success and strength, especially in high-tech sectors. It will also lose WTO protection against non-discrimination, allowing China and other countries to impose export restrictions on rare earth minerals and other commodities it crucially needs and cannot produce domestically.
Countries have so far been responding individually, in their own narrow perceived self-interest. Other than China, no country had stood up to the US until this week, except Canada, albeit inconsistently. President Lula of Brazil stood up this week after the 50% tariff announcement on his country with a strong reply to Mr Trump on social media, threatening him back with Brazil’s Economic Reciprocity Act, also correcting false information about the trade surplus Mr Trump says Brazil has with the US. In fact, according to the US’ own data, the opposite is true. As President Lula said, it is the US which has had a trade surplus in goods and services with Brazil of USD 410 billion over the last 15 years.
The EU has been very docile so far and has disappointed, especially given that it accounts for 38% of global trade and has huge heft in this area if it wishes to use it.
Who will join China, Brazil and possibly Canada in publicly protesting Trump’s resurgent tariffs. As a first step, they only need the EU and other BRICS members to join them in the WTO. But will they? If they do so, this will likely create a momentum of its own, bringing many more frustrated countries forward to join their ranks in the WTO, which the US will not necessarily be able to stop.
India has so far remained silent, giving Trump several unnecessary unilateral tariff concessions, starting from before Mr Modi’s February visit to Washington DC. Will it get the concessions it wants in return in the Bilateral Trade Agreement still under negotiation? Doubtful, though government sources remain hopeful. Can it or will it rise to the occasion, or will it continue its ‘studied’ silence and prefer its abstaining on votes condemning Trump 2.0 actions in both the UN and WTO? The weeks leading to August 1, will provide the much needed answers to these questions.
ABOUT THE AUTHOR
Kamal Malhotra is currently Distinguished Visiting Professor at the NALSAR University of Law, Hyderabad, India. He was a Non-Resident Senior Fellow at the Boston University Global Development Policy Center between June 2022-May 2025. He has also Guest Lectured at the School of Interwoven Arts and Sciences (SIAS), Krea University, India. Prior to his retirement from the United Nations in September 2021, Mr. Malhotra had a rich career of over four decades as a management consultant, in senior positions in international NGOs, as co-founder of a think-tank, FOCUS on the Global South, and in the United Nations (UN) including as its Head in Malaysia, Turkiye and Vietnam (2008-21). He was UNDPs Senior Adviser on Inclusive Globalization, based in New York, USA, for most of the prior decade. Mr. Malhotra is widely published.
