US Tariffs Threaten to Undermine World Trade Organization

Credit: John Birch Society

By Thalif Deen
UNITED NATIONS, Apr 11 2025 – As the Trump administration’s hostility towards the United Nations and other international organizations keeps growing, a New York Times columnist last week proposed what he frivolously described as “something a little incendiary”.

Maybe Trump could follow up on his non-appointment of Elise Stefanik as US Ambassador to the United Nations—who has been virulently anti-UN—by withdrawing the US from the United Nations entirely.

The UN’s 39-storeyed building, the Times columnist remarked, has “amazing views of the East River”—and said, rather sarcastically, it would be a great condo conversion– as a luxury apartment complex.

A White House Executive Order last February was titled “Withdrawing the United States from, and ending funding to certain United Nations organizations, and reviewing United States support to ALL international organizations.”

President Trump, who withdrew the US from the UN Human Rights Council, the World Health Organization (WHO) and the Climate Treaty, has threatened to pull out of UNESCO and the UN Relief and Works Agency (UNRWA) for Palestine Refugees in the Near East– and also to terminate US contracts with the World Food Programme (WFP) in Rome (which was later reversed and described as “a mistake”).

And could Trump reverse his withdrawals from UN agencies –as he did with tariffs? But that seems very unlikely.

Trump’s staggering US tariffs worldwide have not only threatened the longstanding ground rules in world trade but also undermined the Geneva-based World Trade Organization (WTO), described as the only global international organization dealing with the rules of trade between nations.

Deborah Elms, head of trade policy at the Hinrich Foundation, which is focused on trade, was quoted as saying: “I would say the WTO is toast, but what matters now is how other members respond”.

“Do they stand up for the system? Or do they also ignore key principles, provisions and practices?”

In his unpredictable on-again, off-again decision-making, Trump backed down last week on most reciprocal tariffs for a period of 90 days, citing new talks with foreign nations, explaining his reversal. But China, he said, would not be included, and he raised tariffs on its exports to 125 percent.

Perhaps after 90 days, the tariffs will be at play once again, continuing to de-stabilize world trade and the global economy.

The move leaves a universal 10 percent tariff on all other countries except Canada and Mexico, which face separate duties. But it undoes some of the original tariffs — 20 percent on the European Union, 24 percent on Japan, 46 percent on Vietnam.

China has said it will impose reciprocal tariffs on all imports from the United States, escalating a trade war between the world’s two largest economies.

Mandeep S. Tiwana, Interim Co-Secretary-General CIVICUS, a global alliance of civil society organizations (CSOs), told IPS: “We are entering a dangerous age of values-free transactional diplomacy which is leading to the breakdown of the rules based international order”.

A lot of it, he pointed out, has to do with the rise of authoritarianism and populism over the past few years which has elevated political leaders who spread disinformation and rule by personality cult rather than established norms.

“Civil society and the independent media serve as important checks on the exercise of arbitrary power in the public interest but are being attacked in unprecedented ways,” he declared.

Sadly, humanity has been here before in the period prior to the start of the first and second world wars in the twentieth century, which caused immeasurable death and destruction.

Autocratic and populist regimes, he said, are deliberately undermining international norms that seek to create peaceful, just, equal and sustainable societies.

Notably, civil society organising and citizen action offer the last line of defence against the relentless assault on cherished ideals enshrined in constitutional and international law,” said Tiwana.

Asked if the rash of tariffs would lead to a global economic recession, UN Secretary-General Antonio Guterres told reporters April 8: “I’ve been clarifying my position about this issue time and time again. Trade wars are extremely negative. Nobody wins with a trade war. Everybody tends to lose”.

“And I’m particularly worried with the most vulnerable developing countries, in which the impact will be more devastating. I sincerely hope that we will have no recession, because a recession will have dramatic consequences, especially for the poorest people in the world,” he warned.

Dr Jim Jennings, president of Conscience International and Executive Director of US Academics for Peace, told IPS the widespread “Hands Off” protests in the US threaten to return the country to the decades of debate over tariffs that took place during the 19th Century. The issue then, as now, was protectionism—believed to enrich the manufacturing class.

Whereas the Whigs (today’s Republicans) wanted high tariffs, the idea of free trade as a way to reach prosperity was the mantra of the Democrats, who favored the working class.

President Lincoln favored tariffs, but by 1860 admitted that arguing for a protective tariff was unwise for political reasons—few people at that time favored it. Most Americans had come to realize that high tariffs were protecting the moneyed class and simply raise taxes for everybody. Lincoln knew he was unlikely to be elected President if tariffs were the key to his campaign.

Today’s bewildering day in-day out bluffs and threats by Mr. Trump means that the market will continue to bounce around. “Wall Street likes certainty, but the only certainty we can see is that the US economy is in the hands of amateurs”.

“While the idea of comparing our globalized economy to that of 1840-60 is problematic, with the world already teetering on the verge of WW III, a Trade War is the last thing we need,” declared Dr Jennings.

Andreas Bummel, Executive Director, Democracy Without Borders, told IPS “from the standpoint of democratic checks and balances, it is concerning that the US President apparently can unleash a trade war with most of the world’s countries while the US Congress simply looks on.”

But according to an Associated Press (AP) report April 9, the State Department has rolled back an undisclosed number of sweeping funding cuts to U.N. World Food Program emergency projects in 14 impoverished countries, saying it had terminated some of the contracts for life-saving aid “by mistake”.

“There were a few programs that were cut in other countries that were not meant to be cut, that have been rolled back and put into place,” State Department spokeswoman Tammy Bruce told reporters.

Meanwhile, China has said it will retaliate by imposing reciprocal tariffs on all imports from the United States. “This practice of the U.S. is not in line with international trade rules, undermines China’s legitimate rights and interests, and is a typical unilateral bullying practice,” China’s finance ministry said in a statement.

China has also filed a lawsuit with the World Trade Organization, saying the U.S. tariffs were “a typical unilateral bullying practice that endangers the stability of the global economic and trade order.”

Dr. Ngozi Okonjo-Iweala, Director-General of the WTO, said the Secretariat is closely monitoring and analysing the measures announced by the United States on April 2, 2025.

“Many members have reached out to us and we are actively engaging with them in response to their questions about the potential impact on their economies and the global trading system.”

The recent announcements, he pointed out, will have substantial implications for global trade and economic growth prospects.

“While the situation is rapidly evolving, our initial estimates suggest that these measures, coupled with those introduced since the beginning of the year, could lead to an overall contraction of around 1% in global merchandise trade volumes this year, representing a downward revision of nearly four percentage points from previous projections”

“I am deeply concerned about this decline and the potential for escalation into a tariff war with a cycle of retaliatory measures that lead to further declines in trade.”

It is important to remember that, despite these new measures, the vast majority of global trade still flows under the WTO’s Most-Favored-Nation (MFN) terms.

“Our estimates now indicate that this share currently stands at 74%, down from around 80% at the beginning of the year. WTO members must stand together to safeguard these gains.”

Trade measures of this magnitude have the potential to create significant trade diversion effects. “I call on Members to manage the resulting pressures responsibly to prevent trade tensions from proliferating,” said Dr Okonjo-Iweala.

IPS UN Bureau Report

 


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