Unilateral tariff measures by major economies undermine the rules-based multilateral trading system under the WTO. Examine in the light of recent U.S. tariff developments.

Q. Unilateral tariff measures by major economies undermine the rules-based multilateral trading system under the WTO. Examine in the light of recent U.S. tariff developments. (15 marks, 250-350 words)

The WTO order rests on Most-Favoured-Nation treatment and bound tariff ceilings, which oblige members to extend equal, predictable treatment to all partners [1]. Unilateral, executive-imposed tariffs bypass this discipline entirely — and the recent U.S. episode shows the damage persists even when domestic courts eventually strike such measures down.

Erosion of core multilateral disciplines - Country-specific "reciprocal" tariffs breach MFN and exceed bound rates, replacing negotiated concessions with bargaining power [1]. - WTO monitoring recorded a large increase in new tariffs through 2025, with merchandise trade growth projected to fall to 0.5% in 2026 [2]. - Retaliation by affected economies compounds fragmentation, raising supply-chain costs and hitting developing members hardest [2].

The U.S. developments: unilateralism by executive action - A 10% baseline duty (April 5, 2025) plus a 27% additional duty on India were imposed by Executive Order, not by legislated tariff schedules [3]. - In Learning Resources, Inc. v. Trump (Feb 20, 2026), the U.S. Supreme Court held 6–3 that IEEPA does not authorise tariffs, applying the major questions doctrine [4]. - The administration's fallback under Section 122, Trade Act 1974 was struck down by the Court of International Trade (May 2026), though litigation and stays kept duties operative — proving that legal invalidation does not undo commercial disruption [5].

The enforcement deficit at Geneva - With the Appellate Body non-functional since 2019 and 20+ appeals "into the void", the WTO could not itself restrain the measures; the MPIA, now with 61 members, remains only an interim bridge [6]. - Correction thus came from national constitutional law, not multilateral adjudication — a reversal of the system's design.

Drift toward bilateralism: India's response - India negotiated a Bilateral Trade Agreement (2026), cutting duties on $30.94 bn of exports from 50% to 18% and $10.03 bn to zero [7]. - Domestically, the ₹2,250-crore Export Promotion Mission cushions MSME exporters and diversifies markets [3].

Unilateral tariffs therefore weaken the WTO twice over — by violating its rules and by exposing its inability to enforce them. The durable remedy is dispute-settlement restoration and WTO reform, which members have pressed at MC14 [6], with India simultaneously deepening export competitiveness and diversified partnerships. Rebuilding rule-based predictability, rather than reciprocal retaliation, best serves both global welfare and India's trade interests.

(~335 words)

Sources: 1. WTO — Principles of the Trading System (MFN, bound tariffs) — MFN and tariff-binding obligations 2. WTO Trade Monitoring Report, 2 December 2025 — rise in new tariffs; 2026 trade growth projection 3. PIB, Ministry of Commerce — Change in Import Tariff by US / Export Promotion Mission — 10% baseline and 27% India duty; ₹2,250-crore Export Promotion Mission 4. Learning Resources, Inc. v. Trump, No. 24-1287, U.S. Supreme Court (Feb 20, 2026) — 6–3 ruling that IEEPA does not authorise tariffs 5. CRS Legal Sidebar, "Court Decisions Regarding Tariffs" (LSB11332), Congress.gov — Section 122 fallback and trade-court litigation 6. WTO — MPIA and dispute settlement reform, MC14 (March 2026) — Appellate Body paralysis, appeals "into the void", MPIA membership 7. PIB — India–U.S. Bilateral Trade Agreement — tariff cuts on $30.94 bn and $10.03 bn of Indian exports