The resurgence of tariff-based trade policy by the United States poses structural challenges to the WTO-led multilateral trading system. Discuss.

The WTO's founding bargain rests on bound tariffs and non-discrimination under Article I (MFN). Washington's return to unilateral, negotiated-outside-Geneva tariffs erodes that bargain — by end-February 2026 only 72% of world trade moved on MFN terms [1], making this a structural rather than cyclical stress.

Scale of the tariff resurgence

• Broad duties imposed on all G7 partners in 2025, extended in June 2026 to threatened 10–12.5% tariffs on 60 trading partners, including India, the EU, the UK and Australia [2].
• Tariffs as non-trade leverage: a threatened 100% duty on French wines to force withdrawal of France's Digital Services Tax [2] — trade instruments deployed for regulatory coercion.
• These measures are neither bound concessions nor notified FTAs, placing them outside WTO schedules [1].

Structural challenges to the multilateral order

• Non-discrimination hollowed out: shrinking MFN coverage converts rules-based access into bilaterally bargained access [1].
• Enforcement vacuum: the Appellate Body has been inoperative since December 2019 for want of appointments, allowing adverse panel rulings to be "appealed into the void" [3].
• Rule-making stalled: dispute settlement reform remains unfinished business carried past the Ministerial Conference [4].
• Power asymmetry: bargaining substitutes for adjudication, disadvantaging smaller and developing economies [3].

Economic consequences

• WTO projects merchandise trade growth slowing to 1.9% in 2026 from 4.6% in 2025, and to 1.4% if energy prices stay elevated after the Strait of Hormuz disruption [1].
• Investment chills in tariff-exposed, value-chain-intensive sectors — textiles, electronics, machinery [1].

Countervailing resilience

• Trade has not collapsed: largely tariff-exempt AI-enabling goods drove 42% of 2025 trade growth [1].
• India has hedged through the India–UK CETA and India–Oman CEPA, with record exports in FY 2025-26 [5].

Thus unilateralism erodes the WTO's rule-making and rule-enforcing pillars simultaneously, yet the system retains adaptive capacity. The way forward lies in restoring a functioning appellate tier, building plurilateral reform coalitions, and — for India — combining FTA diversification with sustained advocacy within Geneva. A credibly enforceable WTO remains the surest guarantee of predictable market access for the developing world.