US TRADE POLICY UNDER TRUMP AND THE EROSION OF MULTILATERAL TRADE RULES

Abstract

This paper examines how the Trump administration (2017–2021 and 2025–present) eroded multilateral trade norms and changed the global economic system. Three interrelated questions are examined through secondary investigation of legal sources, economic science, and policy literature. The study uses main legal sources (WTO agreements, GATT articles, U.S. trade laws, and dispute settlement reports), peer-reviewed academic literature, international organization reports, and contemporaneous news media for qualitative documentary analysis. Liberal institutionalism, hegemonic stability theory, constructivism, global production network (GPN) theory, and legal institutionalism comprise the analytical framework. The findings show a concerted attack on multilateral trade system fundamentals. The Trump administration's paralysis of the WTO Appellate Body, imposition of unilateral "reciprocal tariffs" in April 2025, negotiation of discriminatory bilateral deals, and expansive invocation of national security exceptions directly violate GATT Articles I, II, and XXI, as well as WTO transparency and exclusive jurisdiction provisions. The U.S. blockade of Appellate Body nominations leaves the WTO's dispute settlement system unable to implement its rules. Studies show that the 2018–19 tariffs caused significant welfare losses, regressive distributional impacts that hurt poorer households, and dynamic costs such as policy uncertainty, lower investment, and supply chain disruption. Sectoral dislocation is hidden by neutral employment consequences. The long-term impacts on global industrial networks, including supply chain reorganisation along regional or national lines, are just beginning to be appreciated. The study finds the multilateral trading system in an existential crisis. The study recommendations include U.S. re-engagement with WTO dispute settlement, urgent WTO reform, increased regional initiatives that are multilaterally compatible, and a reinvigorated research agenda on these changes' long-term impacts.