Economics

A trade war with the European Union could negatively impact many U.S. industries. The lobster trade provides a specific case study of how one significant industry could be severely harmed. 

For more than two decades, China has developed close economic and security ties with many Latin American countries, including Brazil, Peru, and Venezuela. But Beijing’s increasing sway in the region continues to raise concerns in Washington, prompting greater U.S. engagement.

This article was originally published online by the Association of Women in International Trade in the 2025 Summer Communiqué on June 2, 2025. It is easy to default into hyperbole when the state of the international trading system is uncertain. Pundits have proclaimed for years that the World Trade Organization (WTO) is dead, and yet its hallways and meeting rooms keep humming with the noise of government officials hashing out their trade problems. With President Trump’s recent actions to unilaterally impose across the board tariffs on all trading partners, it may feel like most-favored nation (MFN), a core principle of the WTO whereby benefits are extended equally to all, is crumbling. Across three straight administrations, the United States has undermined and threatened the very order it created, seeing itself as above the rules. The current U.S. position could not be in greater contrast to its leadership role at the founding of the institution. In the inter-war period, international efforts to revive economies devastated by the Great Depression faced serious challenges. As historian Patricia Clavin documents, tension between Great Britain and the United States was at the core of the collapse of the 1933 World Economic Conference, where the British government’s protectionist policies and decision to cancel payments of its war debts scuttled international economic cooperation. Britain clung to its system of Imperial Preferences, and failed to meet the challenge of that moment, opening the way for further economic nationalism.  U.S. Secretary of State Cordell Hull saw the dangers of isolationism and urged Roosevelt to see the foreign policy benefits of economic liberalization and how it could support domestic economic revitalization. With the setbacks of 1933, Roosevelt realized that “every Nation of the world has felt the evil effects of recent efforts to erect trade barriers of every known kind. Every individual citizen has suffered from them.” In contrast, he called liberal trade policies “a beacon in the storm of economic madness which has been sweeping over the entire world during these later years.” Hull was determined to scale up those policies beyond regional efforts that led to economic fragmentation. He was directly responsible for the creation of the United Nations and laid the groundwork for what would eventually become the General Agreement on Tariffs and Trade (GATT), building on the U.S. reciprocal trade agreements in the inter-war era. Along with the agreement on tariffs, the United States had plans to complement the Bretton Woods institutions, the World Bank and International Monetary Fund, with a trade organization. Ultimately, the first attempt to establish an international institution to address these concerns was unsuccessful. In 1948, 53 (mainly developing) countries gathered in Havana, Cuba, to craft the third pillar of the new international system. The Charter of the stillborn International Trade Organization (ITO) would have governed many areas that went beyond trade, including employment, commodity agreements, restrictive business practices, international investment, and services. There was no support in the U.S. Congress or the business community for such a deal that would require developed countries, like the United States, to bear the bulk of the economic adjustment burden, while letting others off the hook. President Truman promptly withdrew the ITO charter for consideration by Congress. What was salvaged from the ITO was a more limited, but targeted agreement called the GATT, between a group of 23 countries that agreed to 45,000 tariff concessions affecting $10 billion of trade, about one fifth of the world’s total. Hull’s efforts to lower trade barriers in support of economic growth and to establish a system for the peaceful resolution of trade disputes finally came to fruition under a different administration.  Like Hull, their approach was grounded in three assumptions: that domestic and international prosperity are interlinked, that trade institutions support the rule of law, and that globalization is a tool for advancing well-being amongst the poorest. Together, those assumptions shaped a system of international rules that promoted equality of competitive conditions and provided the necessary flexibility for some groupings of countries to establish more stringent rules. The rules also built in exceptions to allow countries to pursue legitimate public policy goals, including addressing security concerns. Overtime, it expanded to include other issues that the United States prioritized, moving beyond just goods trade, to address non-tariff and internal barriers.  Fast forward to today, and the United States has moved away from those principles, instead embracing a vaguely defined international economic order, where the United States will no longer commit to the preservation of international rules, nor support reciprocity in trade discussions, believing that it  has already given too much. At the same time, the United States is still engaged in negotiations, even if some are asymmetric. Over the last eight years, the United States has shown up to meetings at the WTO and offered some proposals for reform. All the while, the biggest critics of the existing system have offered no alternative vision for what an appropriate international economic order should look like; instead, they are simply content to air grievances without offering concrete solutions. There is no Cordell Hull among them.  What does this mean for the WTO? In all likelihood, it will go into a holding pattern for the foreseeable future, maintaining many of its responsibilities but not adding new ones. However, this does not mean it is dead, but rather just pared down to its basic functions.  It is important to remember that there are many important areas of activity covered by the WTO, even if only a few are ever noticed by critics with little knowledge of the institution. First, its members negotiate new trade rules. In the last few years, despite a lackluster U.S. leadership, the WTO has managed to conclude negotiations to rein in harmful fisheries subsidies, agreed to limit red tape in domestic services markets, and recently signed an agreement on investment facilitation for developing countries. There is even hope that a deal on e-commerce may make it over the finish line in the coming year. Second, the WTO monitors and implements existing rules. Through its various committees, members discuss and resolve differences over trade actions without ever filing disputes. They notify each other of measures they are taking, which helps improve transparency and allows for coordination and debate. The United States is the most active member in those committees, and uses them to nudge countries to adopt certain regulatory approaches and to learn about the positions of other members on specific issues. Third, the WTO plays a crucial role in capacity building and technical assistance. The continuation of those activities to support the less developed countries shows that members still highly value this function. Finally, the WTO has a dispute settlement mechanism, whose appeals stage no longer functions, but twenty-eight members have established an interim appeals mechanism that functions quite well in the meantime.  This is not to say that there aren’t significant challenges that need to be addressed. Importantly, this is not a crisis, but a chronic disease, some elements of which have gone untreated. The 2025 Trade Policy Agenda from the U.S. Trade Representative says that the WTO “has lost its way,” but that “this did not occur overnight.” The report dismisses the Biden administration’s “reform by doing” approach and calls for “meaningful reform” with the participation of the entire membership, “including those that have benefited from the failure of the WTO to fulfil its objectives.” While the organization remains on thin ice with U.S. policymakers, the possibility of reforming the WTO’s core challenges– non-market practices, dispute settlement, special and differential treatment, and enhanced transparency– are not as elusive as some may think. In fact, repositioning the WTO to address modern trade concerns is within reach, but its members, including the United States, will need to recommit to a fairer system that recognizes the linkage between domestic and international prosperity instead of embracing economic nationalism. If members fail to do this, history has already foreshadowed the result.

India’s space policy, once driven primarily by domestic development goals, is increasingly aligning with that of the United States. How it approaches the norms of space governance, however, could provide a path for other Global South nations.

India has historically struck a balance between joining multilateral export-control regimes and maintaining strategic independence through bilateral trade deals and domestic investment. That could be complicated by India’s growing defense exports and increasing U.S. unilateralism.

President Trump doubled almost all aluminum and steel import tariffs, seeking to curb China’s growing dominance in global trade. These six charts show the tariffs’ potential economic effects.