pen: Marta Reynman - Researcher on international relations, geopolitics and contemporary diplomacy
Recent months have caused a geopolitical earthquake in the rules-based international order that has guided world politics since the end of World War II. And free international trade — a key pillar of this system — has come under intense pressure in recent years, with trade tensions between the United States and China continuing since 2019. This development has escalated to unprecedented levels with the second administration of U.S. President Donald Trump, who imposed a strict stranglehold on global trade in April 2025 when he imposed massive, multi-digit tariffs.
The End of an Economic Era
And until Trump’s 2025 “day of tariff liberalization,” barriers to global trade were limited by the framework of the World Trade Organization (WTO), which, through generalized bilateral trade agreements and a common trade dispute settlement mechanism, has promoted the reduction of tariff and non-tariff barriers, and the stability and expansion of global trade. But this trend has reversed in recent years; 2025 saw a marked increase in tariffs around the world, and a decrease in global trade.
What makes this protectionist trend striking is that it is not limited to geopolitical rivals. For example, President Trump imposed 20 percent tariffs in the spring of 2025 on Japan and the European Union — traditional allies and key U.S. trading partners since the Cold War.
Similarly, the United States has threatened its neighbor Mexico with 30% tariffs over differences over immigration and borders, raising doubts about the imminent renewal of the U.S.-Mexico-Canada Trade Agreement (USMCA). And yet, in June 2026, Trump announced that tariffs on industrial equipment produced in Mexico and Canada containing U.S. inputs would be reduced, albeit at the 15% level.
And similarly, the so-called “special relationship” between the United States and the United Kingdom, which has been particularly important since the latter left the European Union, meant nothing when Trump launched his big tariff package in March 2025, subjecting his longtime ally to tariffs of between 25% and 50%.
Who wins the tariff war?
President Trump justified his tariff war by saying it protected U.S. manufacturing and jobs, and confronted the alleged unfair trade practices of longtime U.S. trading partners, ultimately reviving the U.S. economy. However, independent analyses suggest that the costs of tariffs are mainly borne by US consumers, raising commodity prices, and threatening inflation and lower economic growth.
And from a broader perspective, the rise in trade barriers is entrenching global economic disparities by making it more difficult for developing economies – mainly located in Africa and Asia with less economic bargaining power – to sell their products on the global market.
Stabilizing periods in the direction line of customs protection
But the recent proliferation of tariffs in the global economy does not mean that free trade is in an inevitable global downturn. For example, the European Union and India recently signed a free trade agreement that took years to prepare, while in 2026 the finalization of the new EU-Mercosur agreement boosts trade between Argentina, Brazil, Paraguay, Uruguay and Europe by reducing tariffs and other trade barriers. This is happening at a time when historically strong ties between Europe and the US are fragmenting.
In addition, trade relations have seen reform efforts in recent months, with the United States and the European Union reaching an agreement in late 2025, capping U.S. tariffs at 15%. However, while they are clearly lower than the 20-25% "Liberation Day" tariffs, transatlantic trade barriers on many products remain well above pre-2025 levels, meaning trade has only partially recovered to its previous state.
Moreover, although the U.S. Supreme Court struck down some of Trump’s tariffs as unconstitutional at the beginning of 2026, that hasn’t stopped Trump from exploring other ways to impose tariffs by launching investigations into labor law violations in 44 countries. And indeed, the inquiry found that Canada, Ecuador, the European Union, Mexico and Pakistan were negligent in enforcing labor laws, proposing a punitive 10% tariff on these countries. Similarly, Trump has ordered an investigation into major economies such as China, the European Union, India, Japan and Taiwan for alleged overcapacity, again threatening to raise tariffs on these countries.
conditioned freedom
Accordingly, free trade relations are gaining a new and increasingly conditional character based on selective and often unequal bilateral agreements of a transactional nature, outside the current WTO framework. For example, the EU has received reduced tariffs under the new EU-US trade agreement only in return for promises to import more US oil. Similarly, strained relations between the US and India saw a rapprochement earlier this year, with the US promising to cut tariffs from 25% to 18%. This requires India to open its protected agricultural market to US products, and replace Russian oil imports with US oil.
Free Trade in a New Dress
What these developments suggest, then, is that free trade, governed by a common international system of rules and procedures, is no longer taken for granted as an unchallenged status quo. Thus, countries are increasingly seeking to establish alternative free trade relations as traditional relations fragment. And so, while free trade doesn’t seem to be going away completely anytime soon, it seems to have become limited to the “coalition of the willing,” and even when it is rebuilt through bilateral agreements, it remains narrow and fraught with uncertainty and unpredictability. This represents a stark contrast to the global standard that the United States has long championed and promoted after the war. In this new system, free trade is not the default; It must be negotiated and acquired.
comments