WTO at 30: Facing Its Biggest Test Under Trump’s Tariff Regime

This year marked the 30th anniversary of the World Trade Organization (WTO), but the mood among global economists and diplomats was far from celebratory. President Donald Trump’s aggressive tariff regime cast a long shadow over the Geneva commemorations.

Instead of unity, uncertainty dominated speeches and private discussions. The WTO, once a trusted forum for trade dialogue, now faces mounting questions about its relevance and survival, questions amplified by Trump’s policies.

Trump’s Tariffs: Shaking the Foundations of Global Trade

President Trump jolted the international trading system by imposing broad “Liberation Day” tariffs, including a sweeping 10% levy on all U.S. imports. Paused briefly, then set for reinstatement, these tariffs triggered retaliation from major partners and disrupted established global supply chains.

Rising prices and product shortages soon affected U.S. consumers and businesses. According to policy analysts, the effective U.S. tariff rate soared to heights not seen since before World War II. Trump’s actions didn’t just raise trade costs; they fundamentally challenged the WTO’s vision of a world governed by agreed-upon rules.

Did you know?
Did you know? The World Trade Organization’s highest dispute panel, the Appellate Body, has been nonfunctional since 2019 due to U.S. opposition to new appointments.

WTO in the Crosshairs: Can It Remain Relevant?

The Geneva-based WTO was never immune to criticism. Workers in the U.S. and Europe have long blamed it for job losses linked to globalization, while developing nations argue it favors rich countries. But Trump’s open hostility marked a new level of threat to its authority.

Director-General Ngozi Okonjo-Iweala, at the 30th anniversary summit, reminded delegates that the WTO should function as a “bedrock of predictability.” Yet the proliferation of Trump’s tariffs and America’s turn toward bilateral deals undermined the very foundation of multilateral trade cooperation.

The Trump Trade Doctrine: America First, Multilateralism Second

Trump’s arguments resonated with many Americans still reeling from decades of manufacturing decline. At a major business speech before the 2024 election, he famously declared, “The most beautiful word in the dictionary is ‘tariff,” framing such measures as patriotic and essential for protecting U.S. workers.

Economists remain divided. While some, like Ian Fletcher of the Coalition for a Prosperous America, claim tariffs can boost domestic job growth, critics warn they risk Balkanizing the global market and triggering damaging trade wars.

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China, Deficits, and the WTO’s Identity Crisis

Underlying Trump’s strategy is frustration over China’s economic rise since joining the WTO in 2001. China’s cheap exports flooded U.S. stores, fueling America’s $20 trillion trade deficit over five decades, while China amassed nearly $7 trillion in surpluses. Trump frames this as a national emergency and a WTO failure.

Chinese officials, in turn, accuse the U.S. of undermining the very system it once championed. Other major economies have begun pursuing their own trade remedies, blurring the boundary between rules-based commerce and power-based deals.

What Comes Next: Can the WTO Adapt and Recover?

With U.S. tariffs due to be reinstated and the organization’s dispute resolution system already hobbled, WTO members face a stark choice: push for bold reforms or risk irrelevance. Some leaders call for modernizing rules to address digital trade and state-owned enterprises, while others urge reconnecting trade policy with broader social and environmental goals.

The stakes are global. No alternative currently offers the predictability and scope of the WTO. The coming years may define not just the organization’s legacy but the future architecture of global commerce itself.

Despite the turmoil, the WTO’s defenders hope that the crisis will spark renewal rather than collapse. As negotiators regroup in Geneva and major economies reassess, the world is left asking: Is this the end of the rules-based trade era or the beginning of something new?