President Donald Trump’s proposal for 100% tariffs on India and China is the ultimate stress test for the global trading system. The plan, which he has asked the EU to join, would push the principles of free trade and the institutions that govern it, like the WTO, to their absolute breaking point.
Such a massive, punitive tariff, applied for geopolitical rather than commercial reasons, would violate the core tenets of the post-World War II economic order. It would represent a decisive turn towards a world where might makes right in trade, and where economic ties are entirely subservient to the strategic interests of great powers.
The administration is proposing this stress test out of frustration with its inability to end the war in Ukraine through other means. It is a high-risk move that bets the stability of the entire global economy on the hope that it can coerce Russia’s allies into changing their foreign policy.
The first results of this stress test will come not from the WTO, but from the US Supreme Court. Its ruling on the legality of the President’s tariff authority will be the first indication of whether the system can withstand this unprecedented pressure, or if it is set to buckle and break.
