As President Donald Trump looks to escalate his bid to acquire Greenland, he plans to slap a 10% tariff, starting February 2nd, on all imports entering the United States from NATO countries that oppose him. He continued by saying such tariffs would be raised to 25% on June 1, 2026 and would remain in place until a deal was reached with the Arctic country. This all highlights a very important, ongoing issue: What part does the World Trade Organization have in all of this?
Trump is clearly weaponizing tariffs as he continues to apply pressure on Greenland and NATO member countries. Usually, a country like the U.S. wouldn’t be in a position to threaten allies so easily; so, what has changed? The WTO has become powerless in many ways and irrelevant in the eyes of Trump.
The question that the WTO now faces is: What’s next? How do they regain the power they once held? Can the WTO function amid the protectionist tactics the Trump administration continues to exhibit? The answer is uncertain, but as Trump pushes forward with his new “America First Agenda,” we can assume his policies won’t support the WTO; instead, he sees it as a liability or a roadblock.
As an intergovernmental organization, the WTO used to regulate 98% of the world’s trade and covered 98% of the global economy’s Gross Domestic Product. That number has dropped to 72% and could fall further. Perfectly illustrating that up to this point, they have failed to adapt and reform, they no longer hold power in the regulation of the global trade market or in trade dispute resolution. To make their problems even more complex, many of the levers of power on which the WTO relies are being blocked by the U.S., specifically the Appellate Body of judges.
In 2017, the U.S. blocked the appointments of new judges, their reasons stemming from judicial overreach and concerns over security and sovereignty, which crippled the system’s ability to enforce rulings. Countries can still file appeals, but if fewer than the required three board members are present, the Appellate Body has essentially lost its ability to hear them. This creates an “appeal void,” which, in turn, effectively halts the final stage of the dispute resolution process. This has severe impacts on trade deals and disputes, not to mention what this implies for developing countries that rely on appeals and tariff retaliation as a countermeasure.
Another prime example of the WTO’s weakening power comes from a trade deal between China and the European Union, which has been ongoing since June 2024. The two great powers are disputing over subsidies for electric vehicles. As of January this year, reports are telling us that they are nearing a resolution, one that could’ve been solved much quicker if the WTO were functioning as it should.
The WTO should be the primary arbiter. Countries have to rely on bilateral “price undertakings” and unilateral agreements because the WTO’s legal system is viewed as too slow or even broken. The Trump administration has proven a necessary point: The WTO needs reform, and without it, trade disputes and wars will continue.
One of the main flaws that continues to hinder the WTO is its consensus-based framework: All 166 members must agree or have no objection when making major decisions. This causes several issues within the organization and for many countries, and often these problems can’t be overcome without compromise or watered-down solutions. These resolutions don’t often benefit the U.S.; instead, they are unproductive.
For the U.S. and the WTO to function effectively, they need to work together to resolve the current impasse. The U.S. and Donald Trump believe that the WTO does not have their best interest in mind. This poses a threat to the U.S., one that Donald Trump has successfully minimized in his pursuit to repair the economy that his “America First” agenda seeks to extend.
TRUMP’S DERANGED GREENLAND TEXT IS DANGEROUS
Rather than withdrawing from the WTO, the U.S. should actively work with other members to reform the IGO. They should take charge of modernizing outdated practices and transform the WTO into something that evolves in a market that is constantly doing just that.
The WTO is at a crossroads. Can the U.S. guide it toward a revolutionary adaptation, or will it accelerate the end of the global trade body?
