[LINK] Tarrifs for everyone

[Stephen Loosley]

Another perspective on Trump's tariffs?



"Outside In |  Real threat posed by Trump’s tariffs worse than a global recession"


The US president cannot be allowed to replace world’s hard-won multilateral compromise and cooperation with bullying bilateralism


United States / World Opinion : By David Dodwell  (Published: 4th April 2025)

https://www.scmp.com/opinion/world-opinion/article/3305104/real-threat-posed-trumps-tariffs-worse-global-recession


Whatever the megalomaniac hubris of US President Donald Trump in imagining his administration can bring the world’s economies to heel in his quest to “Make America Great Again”, the reality is the outcome of this tariff madness will depend not on Trump, but on how the world responds.


It will depend on whether the world recognises that the primary threat is not the potential for a tariff war to trigger a global recession and where the worst of this will fall, though this would be threat enough.


Rather, it is whether Trump succeeds in demolishing the fabric of the multilateral compromise and cooperation that have driven economic development and poverty reduction over the past seven decades, replacing it with a pattern of bullying bilateralism.


This might suit the US, as the world’s largest economy, but would be catastrophic for most of the rest of the world.


As Alan Wolff, former World Trade Organization deputy head and now a fellow at the Washington-based Peterson Institute for International Economics, argues, with the US accounting for just 9 per cent of the global goods trade, the future of rules-based trade primarily depends on the rest of the world.


Simon Evenett and colleagues at the Lausanne-based International Institute for Management Development have argued that with the exception of a tiny group existentially reliant on the US (mainly Canada and Mexico), even in a worst-case tariff war, most economies could, if necessary, replace virtually all of their US trade with statistically modest growth in trade with other countries.


Trump slaps 34% (+20% earlier) reciprocal tariffs on Chinese imports as part of ‘Liberation Day’ package


Even though the US was the world’s largest single importer in 2022 (importing goods worth US$3.13 trillion), ignoring other leading importers like China or Germany, the 233 economies that make up the rest of the world’s import markets accounted for US$16.6 trillion – five times the size of US imports.


The crux is whether governments get divided, bullied and browbeaten into bilateral haggles with the Trump administration, or stick together in support of multilaterally agreed rules of trade.


Even if the US sticks aggressively to its divide-and-rule strategy, so long as other economies stand together, the harm inflicted by a US trade war would be limited. “America first” would become “America alone” as other economies reduce their reliance on the US market and focus instead on building trading relations with countries that have a healthier respect for the cooperation, compromise and coordination intrinsic to multilateralism.


Trump and other recent US administrations have talked about the importance of remaining committed to the “international rules-based order”, and I’m sure somewhere, buried deep down, in the chaos of the past 10 weeks there remain many in the US administration who claim to retain such a commitment.


But it is important to emphasise that when US officials talk of a rules-based order, they are light years away from supporting the principles of compromise and cooperation at the heart of multilateralism. Rather, they are talking about a world in which the rules are drafted, endorsed and enforced by the US.


(Trump won’t let Europe turn Uncle Sam into ‘Uncle Sucker’, US defence chief says)


As such, much of the US discontent with the alleged erosion of the rules-based order is that others have increasingly sought to play a role in drawing up the rules. As Stewart Patrick, senior fellow at the Carnegie Endowment for International Peace, noted in a recent commentary: “Traditionally, globally dominant powers have been reluctant to accept significant constraints on their freedom of action.”


Unlike small economies that lack bilateral clout, relying heavily on the compromise and cooperation at the heart of multilateral agreements, economic giants like the US are strongly tempted to prefer the unilateral and bilateral options open to them. As a result, the US has been ambivalent and selective in its engagement in, or support of, multilateralism.


This was vividly illustrated in a recently released index of countries’ support for UN-based multilateralism, which revealed the US has ratified only around 60 per cent of major UN treaties, has since 2018 voted with the majority in the UN General Assembly less than 25 per cent of the time, and introduced nearly 180 “unilateral coercive measures” since 2010 – over three times more than any other UN member.


As a result, out of 193 countries ranked for their support for multilateralism, the US came in last – below Afghanistan, Iran and North Korea.


(Trump stops US engagement with UN Human Rights Council and Palestinian relief agency)


As the study suggests, when the US talks of a rules-based order it refers to “the set of behaviours or rules favoured by the United States and its allies”, rather than multilateral compromise and cooperation. It explains why the new US administration has embarked on a 180-day review of whether it should support or withdraw from all international organisations, conventions and treaties – including the United Nations and WTO.


Countries scrambling to work out how to respond to Trump’s tariff agenda therefore need to recognise the threat is about more than trade. It is about whether multilateral cooperation is going to be forced to yield to bullying bilateralism.


As the Carnegie Endowment’s Patrick put it: “This ‘stop-the-world-I-want-to-get-off’ mindset is based on the fantastical assumption that the United States can replicate the capacities of multilateral organizations and the global public goods they provide.”


The priority for governments (and business organisations) must be to resist Trump’s siren calls for bilateral arm-wrestling, and instead meet urgently to agree on a common response, not just on trade, but on all those other global challenges (such as climate change and the threat of pandemics) none of us can resolve alone.


The imperative is to respond using global (multilaterally agreed) rules, and to refuse to allow might to become right.



David Dodwell is CEO of the trade policy and international relations consultancy Strategic Access, focused on developments and challenges facing the Asia-Pacific over the past four decades.