Beijing, April 19, 2025 – As trade across the world is being frozen by uncertainty over US President Donald Trump’s chaotic tariff policy, questions arise: when are the so-far silent voices in defence of rules-based multilateralism in trade going to awaken?
Why are they not already shouting from the rooftops? And in the face of such deliberate and unprecedented abuse of global trade rules, what should those voices be demanding?
The first excuse must be that the chaos surrounding Trump’s 19 executive orders, four memorandums and three proclamations related to trade and tariffs since his January inauguration make for an impossible moving target.
Whether in business or government, whatever the sector or country, there is a strong case for waiting for more stability or clarity over what is real, and what is choreographed theatre.
The second is that many of Trump’s trade-related executive orders are so flagrantly at odds with globally agreed rules that many retain optimism there will be at least a few adults in the room with the courage to tell the emperor he is wearing no clothes, or at least inappropriate ones.
Some believe the US legal system may yet bring the president down from the clouds. The Liberty Justice Centre has filed a case with the US Court of International Trade, a federal court with jurisdiction over most trade-related issues, challenging Trump’s power to usurp Congress’ constitutional authority to oversee trade issues. Similar lawsuits have been filed in Florida and California.
But the rest of the world cannot wait forever. Uncertainty alone is inflicting harm. Many of the 30,000 exhibitors at the Canton Fair in Guangzhou, China’s biggest trade expo, complain business has frozen.
International buyers have shrivelled from 250,000 last autumn to 170,000 this month, as many hold back until the dust around the tariff war settles.
The world’s US$82 billion diamond trade has reportedly “ground to a halt”. The US is the world’s largest diamond market, and traders in Antwerp say trade has fallen to one-seventh of normal levels.
Diamond exporters, from Botswana to Lesotho, are hard hit, along with Indian polishers.
The World trade Organisation,- which has the most to lose from a collapse into what former IMF executive director Hector Torres calls “capricious ‘deal-based’ disorder” – has broken the silence with warnings of the harm likely to be inflicted by Trump’s rapidly escalating tariff war.
The WTO expects North America’s exports to fall this year by 13 per cent, as the only region in the world to see both imports and exports contract.
From a previous forecast of 3 per cent growth in the global goods trade this year, the WTO now expects a contraction of 0.2 per cent: “I’m very concerned,” said WTO director general Ngozi Okonjo-Iweala.
With the WTO predicting an 81 per cent fall in US-China trade, which could cut global gross domestic product by 7 per cent in the long term, Okonjo-Iweala says the US has in effect cut itself off all imports from China.
Augmenting the harm, the goods-focused tariff war is negatively affecting the global services trade (in which the US maintains a huge trade surplus), including logistics, travel and international investment.
Back in January, at the World Economic Forum panel discussion on tariffs, Okonjo-Iweala had seemed optimistic: “Trade and the WTO are about much more than tariffs ( … ) Please, let’s not hyperventilate.” She urged everyone to “chill” and “take a deep breath”.
She is right to argue the WTO is about more than tariffs. It sits alongside the International Monetary Fund, World Bank, and an array of UN organisations under threat from Trump’s war on multilateral cooperation.
His rambunctious preference for bully-based bilateral deal-making may be a greater threat than tariffs.
Through the fog of controversy over tariffs, many may have forgotten Trump’s February 4 executive order to review support for all UN-related organisations and international treaties.
Withdrawal from the World Health Organization, heritage body Unesco, children’s fund Unicef, relief agency UNRWA and the Paris climate accord has been decided or is all but certain.
The WTO – even the UN in its entirety – is under scrutiny. The prospect of the US running rogue, outside the rules-based international order held in place since 1944 by the Bretton Woods agreements, is a threat all of us should fear.
If there is comfort, it is that despite Trump’s passion for unilateralism, most countries remain resolutely supportive of multilateral cooperation on the many global challenges we face – and that includes tariffs and the rules underpinning trade.
That points to a single imperative: if economies are unable to resist Trump’s siren call for negotiations on some kind of tariff deal, they need to engage on the basis of the WTO’s multilateral rules – which starts with the bedrock condition of non-discrimination viz-a-viz other countries.
In short, even if a country is forced to bow to US tariffs, and to impose retaliatory tariffs, these retaliations should not apply to other trading partners.
It is encouraging that the 10-member Association of Southeast Asian Nations and 27-member European Union are each looking into negotiating with the US as a group.
In their cooperation lies negotiating strength, and the defence of international trade rules.
At the WTO, there is recognition that this tariff crisis has been inflamed in part by unsatisfied demands for reforms. These need to be addressed urgently and multilaterally.
Meanwhile, negotiators need to keep firmly in mind the advice of former WTO deputy director general Alan Wolff: “These are the rules we will live by until we invent something better.” (South China Morning Post)
