Customs tariffs: “The world is perceived as a combat arena and no longer as a space for cooperation”

Chris­t­ian Deblock. Through­out his­to­ry, tar­iffs have grad­u­al­ly been low­ered until they lost their cen­tral place in trade nego­ti­a­tions between states. How­ev­er, each coun­try remains in con­trol of its tar­iffs, as this is a sov­er­eign right. Since the Sec­ond World War, with the estab­lish­ment of the GATT (Gen­er­al Agree­ment on Tar­iffs and Trade, signed in 1947) and then the WTO (World Trade Organ­i­sa­tion, cre­at­ed in 1995 by the Mar­rakesh Agree­ment), tar­iffs have been great­ly reduced and reg­u­lat­ed with the ulti­mate aim of har­mon­is­ing prac­tices and ful­ly lib­er­al­is­ing inter­na­tion­al trade.

Today, around 80% of inter­na­tion­al trade is con­duct­ed on the most favoured nation prin­ci­ple. After a series of nego­ti­a­tions, the States under­took to respect max­i­mum cus­toms duty rates, in oth­er words the “bound tar­iff”, while the “effec­tive tar­iff” cor­re­sponds to the rate applied in prac­tice. Thus, thanks to the bound tar­iffs, inter­na­tion­al trade enjoys greater pre­dictabil­i­ty and stability.

Along­side the mul­ti­lat­er­al tar­iff, there is a sec­ond cat­e­go­ry linked to region­al agree­ments, such as NAFTA/CUSMA, Mer­co­sur or the Euro­pean Union. Final­ly, and more mar­gin­al­ly, there are pref­er­en­tial agree­ments applied for devel­op­ing coun­tries, with­out reci­procity. To this panora­ma, we must add the so-called “applied cor­rec­tion” mea­sures when coun­tries use unfair prac­tices such as dump­ing or subsidisation.

Dur­ing nego­ti­a­tions, inter­na­tion­al trade rules have been strength­ened, as have dis­pute set­tle­ment pro­ce­dures. All this is to avoid abuse and uni­lat­er­al­ism by members.

Although the archi­tec­ture of the rules gov­ern­ing inter­na­tion­al trade is firm­ly estab­lished, the Unit­ed States enjoys con­sid­er­able lee­way. Under Sec­tion 301 of the Trade Act of 1974, the Trade Rep­re­sen­ta­tive may sus­pend trade con­ces­sions or impose restric­tive mea­sures if it is demon­strat­ed that the trad­ing part­ner is vio­lat­ing its trade com­mit­ments or has dis­crim­i­na­to­ry trade prac­tices. Denounced by sev­er­al coun­tries, the WTO has nev­er­the­less val­i­dat­ed this mech­a­nism. It is pre­cise­ly this tool that is now being used against China.

Anoth­er lever is Sec­tion 232 of the Trade Expan­sion Act of 1962, which gives the Pres­i­dent the pow­er to impose tar­iffs or take any oth­er mea­sure if a sub­stan­tial increase in imports is like­ly to cause or threat­en irrepara­ble harm to an Amer­i­can indus­try or the Amer­i­can econ­o­my. We should also men­tion the Inter­na­tion­al Emer­gency Eco­nom­ic Pow­ers Act of 1977, which Pres­i­dent Trump invoked on 2^nd April 2025.

Dur­ing his first term in office, Don­ald Trump ini­ti­at­ed an over­all increase in cus­toms duties. How­ev­er, the announce­ments fol­lowed one after the oth­er accord­ing to a cer­tain log­ic: the mea­sures first tar­get­ed NAFTA – described by the Amer­i­can Pres­i­dent as “the worst agree­ment ever signed by the Unit­ed States” – before turn­ing to Chi­na, then tar­get­ing the Euro­pean Union.

Trump’s sec­ond term is char­ac­terised by the bru­tal­i­ty of the meth­ods employed and the accu­mu­la­tion of mea­sures from all angles. No part­ner is spared. On 1^st Feb­ru­ary 2025, three exec­u­tive order­spro­vide for the appli­ca­tion of +25% cus­toms duties on Mex­i­can and Cana­di­an imports and +10% on prod­ucts import­ed from Chi­na. At the same time, Pres­i­dent Trump asked the var­i­ous agen­cies involved to draw up an inven­to­ry of how coun­tries dis­crim­i­nate against the Unit­ed States in trade mat­ters (tar­iffs, sub­si­dies, tax­es, reg­u­la­tions, etc.), by 1^st April.

The result was announced on 2^nd April: a gen­er­al tar­iff of 10% and addi­tion­al tar­iffs known as rec­i­p­ro­cal tar­iffs for almost all coun­tries, with the notable excep­tion of Cana­da and Mex­i­co. These include the EU (20%), Chi­na (34%), Japan (24%), Viet­nam (46%), Cam­bo­dia (49%) and Tai­wan (32%). On Wednes­day 9^th April 2025, the Unit­ed States imposed new sur­tax­es on prod­ucts from near­ly 60 trad­ing part­ners, with addi­tion­al cus­toms duties rang­ing from 11% to 60%, with the excep­tion of Chi­na, whose prod­ucts were taxed at 104%. How­ev­er, the sit­u­a­tion changed again short­ly after­wards, with Don­ald Trump announc­ing the sus­pen­sion of rec­i­p­ro­cal tar­iffs for 90 days. Trad­ing part­ners are now sub­ject to uni­form cus­toms duties of 10%, with the notable excep­tion, once again, of Chi­na, this time taxed at 125%.

This pol­i­cy is a com­plete break with the inter­na­tion­al­ist vision that pre­vailed from the pres­i­den­cy of Franklin D. Roo­sevelt to that of Barack Oba­ma. It is now being replaced by a geo-eco­nom­ic and “com­pet­i­tive­ness” vision of the world. If, ulti­mate­ly, the aim is to refo­cus the glob­al econ­o­my on the Unit­ed States, this vision already exists; it is the one that Chi­na is pur­su­ing, with the aim of dis­lodg­ing the Unit­ed States from its still hege­mon­ic posi­tion. But does Don­ald Trump real­ly have the means to realise his ambi­tions? Can he apply the same meth­ods as Chi­na with­out jeop­ar­dis­ing the eco­nom­ic sta­bil­i­ty of his own country?

Forced to react, the Euro­pean Union has pre­pared a pack­age of mea­sures to respond to the Amer­i­can threats. The reac­tions were imme­di­ate, although, in fact, rel­a­tive­ly cau­tious. Mea­sures have there­fore been tak­en to retal­i­ate against a selec­tion of Amer­i­can prod­ucts. This cau­tious reac­tion can be explained first and fore­most by the desire to avoid esca­la­tion with an extreme­ly pow­er­ful trad­ing part­ner, but also to avoid attack­ing prod­ucts with a glob­alised val­ue chain. It is eas­i­er to tax oranges than car parts from a vehi­cle man­u­fac­tured and assem­bled in dif­fer­ent countries.

But since 2^nd April 2025, Don­ald Trump has shak­en up the entire organ­i­sa­tion of val­ue chains. The real ques­tion is whether or not the Euro­pean Union will tip over into the geo-eco­nom­ics of com­pet­i­tive­ness. Mario Draghi’s report, pre­sent­ed in Brus­sels in Sep­tem­ber 2024, already sound­ed the alarm about the loss of com­pet­i­tive­ness of Euro­pean com­pa­nies in the face of Amer­i­can and Chi­nese giants. It point­ed out the dan­gers loom­ing over the EU and called on Mem­ber States to rethink trade poli­cies. Euro­pean val­ues are still part of lib­er­al inter­na­tion­al­ism, but in the face of the bru­tal­i­ty of cur­rent meth­ods, is this the right strategy?

Nat­u­ral­ly, with the new mea­sures sought by the Trump admin­is­tra­tion, there will inevitably be con­se­quences for the glob­al econ­o­my. Trade will be dis­rupt­ed, under­min­ing the sta­bil­i­ty that the busi­ness world needs to func­tion. Price increas­es and eco­nom­ic shocks are to be expect­ed every­where. Accord­ing to most mod­els, the most frag­ile economies will be the first and hard­est hit.

Euro­peans should not under­es­ti­mate the impact on their own mar­ket. Admit­ted­ly, two thirds of its trade is inter­nal, but all mem­ber coun­tries have trade sur­plus­es with the Unit­ed States. Con­cerns about the long-term impact main­ly cen­tre on Amer­i­can for­eign direct invest­ment (FDI): 40% of Amer­i­can FDI is in Europe (in Ire­land, the Nether­lands, the Unit­ed King­dom, etc.). A move­ment to repa­tri­ate cap­i­tal to the Unit­ed States will dam­age many Euro­pean economies, first and fore­most Ire­land, which is par­tic­u­lar­ly exposed, since half of its GDP depends on Amer­i­can multinationals.

The log­ic of rival­ry has tak­en over in inter­na­tion­al affairs, with actors now act­ing accord­ing to a com­pet­i­tive and strate­gic vision. The Unit­ed States is act­ing in the name of nation­al eco­nom­ic urgency and opt­ing for exag­ger­at­ed uni­lat­er­al­ism. The world is per­ceived as a com­bat are­na and no longer as a space for coop­er­a­tion.  The trade war is just anoth­er war among all the exist­ing battlefields.

Interview by Alicia Piveteau