Chasing Windmills: Trump’s Brazil tariffs and the Latin American ‘backyard illusion’

On 30 July, President Trump issued an executive order raising tariffs on Brazilian goods by 40%, totalling 50% when added to the 10% baseline announced in April. Invoking emergency powers under the International Emergency Economic Powers Act (IEEPA) and the National Emergencies Act (NEA), the justification wasn’t an economic threat, but Brazil’s domestic legal actions, particularly Supreme Court measures against the spread of misinformation in social media platforms and the trial of former president Jair Bolsonaro, accused of undermining Brazilian democracy. This represents economic coercion, violating the principle of non-intervention, which prohibits interference in the domestic affairs of sovereign states, and WTO rules. The blog focuses on how these trade tariffs are a tool to achieve geopolitical goals in the pursuit of hegemonic leadership. The executive order targeting Brazil breaches US obligations in the GATT: Article II:1(b), which binds it to agreed maximum tariff rates, and Article I:1 (most-favoured-nation treatment), which requires equal treatment of all WTO members. It doesn’t meet the requirements of a national security exception under Article XXI as interpreted by WTO jurisprudence. The measure also breaches Article 23 of the DSU, which prohibits unilateral trade retaliation. More than violating such commitments, the US administration is subverting [...]

By |2025-08-01T14:19:54+01:001 August 2025|Blog, UK - Non EU|0 Comments
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The Long Game beyond tariffs

The global economy faces a roller-coaster ride every time Mr. Trump is in the White House. Last time, a focus on controlling China’s growing economic power meant that the rest of the world narrowly escaped the wrath of the United States executive, with some tariffs on some sectors. This time around, things are quite starkly different: it is difficult to even know who constitutes a friend or a foe. All trading partners are now threatened with high horizontal tariffs in the name of “reciprocity”. Adding to this list of unknowns is the uncertainty around non-tariff policies, the uncertain implementation of non-binding deals, and the nature of an elusive collective response. First, tariff and non-tariff policies. Trump appears focused on tariffs, using import tariff threats to secure various trade concessions and other commitments. Unsurprisingly, the prevailing vexation of the rest of the world is regarding the higher tariffs on their exports to the US. There will certainly be losers both in the US and its trading partners, due to the shocks of tariff hikes. The hope is for a predictable and stable trading environment to be restored soon. However, while we worry about tariff hikes and policy uncertainty, we should not [...]

By |2025-08-01T13:02:51+01:001 August 2025|Blog, International Trade, UK - Non EU|0 Comments
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The UK-US ‘geopolitical’ deal: A dangerous precedent for the UK and the world

We are living in a geopolitical world. While states may cloak their actions in legal justifications or economic reasoning, trade has become a tool to assert power, control narratives, and forge alliances. Trade deals are being designed to reduce vulnerabilities, not barriers. The recently announced US-UK deal is not a traditional trade agreement but a ‘geopolitical’ deal strongly reflecting the US’s geopolitical rivalry against China. Lacking the legally binding nature of international agreements, the deal sidesteps legal frameworks and instead stakes its importance on strategic alignment. As such, it signals a broader shift in how the US, which has its global leadership threatened by the rise of China as a superpower, now uses trade policy: not as a matter of market efficiency or legal commitments, but as an instrument of geopolitical influence and national security. Furthermore, the deal clearly shows the second Trump administration’s strong intention to force trade partners to collude with the US to squeeze China from global supply chains. Securitising supply chains At face value, the deal includes a few economic concessions, conditional on fulfilling security-related requirements. For example, the US has agreed to reduce tariffs on British steel, aluminium, and automobiles. In return, the UK will [...]

By , |2025-05-14T09:49:44+01:0014 May 2025|Blog, International Trade, UK - Non EU|0 Comments
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The real Donald Trump: A free trader in protectionist clothing or vice versa?

This blog was originally published in 2018. We are republishing now because it is striking how much of its analysis and assessment of President Trump’s approach to trade and tariffs resonates today. Importantly, looking back in this way helps to give a longer run historical perspective on the Trump approach to trade policy, which may also help to shape thinking about the future, and responses to that future. Note from the author: In 2018, I described the tug-of-war between the mercantilist and Reaganite factions of the Republican party as the key to understanding the trade policy fluctuations of Trump's first term. This time around, the mercantilists have clearly won. The explicit tying of Trump's "reciprocal" tariffs to U.S. bilateral trade deficits, along with a baseline ten percent tariff, indicates that trade deals alone are not the goal. Trump wants to end trade deficits, pursue import substitution in manufacturing and bring back a 19th century tax system based on customs revenue. These are disastrous goals in themselves; moreover, nothing America's trading partners can do with their own trade policies can satisfy them. This is why the markets have melted down. Perhaps as the effects take hold in the real economy, Trump [...]

By |2025-04-09T14:53:12+01:009 April 2025|Blog, International Trade, UK - Non EU|0 Comments
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The ‘new normal’: Can the UK and other democratic middle powers play a pivotal role?

We are now living in the ‘new normal’ where the US presence is absent in maintaining the international trade order. The US played a major role in building and maintaining the open and rules-based world trade order from the latter half of the 20th century to the first decade of the 21st century. During the first Trump administration (2017-2021), world trade was exposed to US protectionism involving unilateral tariffs, withdrawal from the Trans-Pacific Partnership (CPTPP) and the renegotiation of the North American Free Trade Agreement (NAFTA). The Biden administration (2021-2024) revised the US’ unilateralism by promoting international cooperation with its strategic allies in areas of US interest, such as G7 work on economic security and the Indo-Pacific Economic Framework for Prosperity (IPEF). Yet, its inward-looking approach remained basically the same as the previous Trump presidency. For example, President Biden retained most of the unilateral tariffs, especially those on Chinese imports, that were imposed during the Trump administration. The Inflation Reduction Act (20220) and CHIPS and Science Act (2022) prioritised domestic industry by providing subsidies and other financial incentives. The ‘new normal’: The absence of the US in the international trade order With Trump back as President of the US, we are [...]

By |2025-03-14T14:21:55+00:0014 March 2025|Blog, International Trade, UK - Non EU|0 Comments
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Will Trump’s tariff policy correct an unusual imbalance?

One of the quirks of tariff regimes is that EU and UK light vehicle exports to the US face just a 2.5% tariff whereas those coming the other way face a 10% charge on a vehicle's declared landed value[1]. It seems surprising that this difference has continued for as long as it has, but it probably won’t last much longer. President Trump has been threatening allies and enemies alike with tariffs but – as in Canada and Mexico – he has postponed them following political, or rather quasi-military concessions. It would not been entirely surprising if these threatened tariffs were not actually implemented. While with Trump it is unwise to be too definitive with predictions, in this fast-changing environment steel and aluminium-specific tariffs now appear likely. Attention now shifts to the EU and the UK. The former has long been in the President’s sights, and the latter potentially is, too, although Trump has hinted he could give the UK better treatment than the EU. The promise of a second state visit and a ride down the Mall in a gilded cage or carriage, may have some economic benefits after all. Significantly, before President Trump has “decided” on his tariff policy [...]

By |2025-02-11T08:59:37+00:0010 February 2025|Blog, International Trade, UK - Non EU|0 Comments
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The CPTPP does not prevent the UK from aligning its agri-food regulations with the EU.

One reason the UK Government wanted to join a trade agreement consisting of Pacific Rim countries, the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), was to prevent any current and future UK Governments, from undertaking regulatory alignment with the EU. As Lord Frost explained in 2021, ‘…. to do trade agreements with other countries [i.e. CPTPP] you need to have control of your own agri-food and SPS [Sanitary and Phytosanitary] rules”. A UK-EU SPS agreement, which the Labour government has promised to pursue, would likely result in at least some alignment of regulation in SPS areas: human, animal and plant life and health. In these areas, the UK would lose some control over its rules. So, can the CPTPP prevent the UK from concluding an Agreement with the EU? We argue that it cannot. New Zealand conclusively proves that it is indeed possible to be a CPTPP party and also have an EU veterinary agreement. Its EU veterinary agreement reduces the incidence of border checks in a few areas on animal products. However, such a light agreement (New Zealand, which exports few products to the EU and from 18,000 kilometres away) would hardly resolve the border barriers facing UK farmers. So [...]

By , |2024-12-17T11:01:44+00:0017 December 2024|Blog, UK - Non EU, UK- EU|0 Comments
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How Trump affects UK Trade Policy

David Henig is the Director of the UK Trade Policy Project at the European Centre for International Political Economy (ECIPE).  Just for a short time, all went quiet in the UK trade world. A Labour government meant the end of Conservative traumas over EU relations regularly resurfacing. President Biden didn’t do trade deals with anyone, and new UK Ministers made few swift decisions. Meanwhile, the EU reset has been more about smiles than substance. To be fair, that wasn’t going to last. Though the secrecy instincts of Whitehall linger with a new government, there isn’t much point in a trade strategy shaped without extensive external input and some controversy over decisions. This will need to happen at some point (whether before or after publication) and is an inevitable consequence of choosing priorities. Similarly, judging by ministerial visits, the only trade deal close to conclusion is with the Gulf Cooperation Council, which if agreed is likely to prove controversial, perhaps in terms of labour and environmental provisions, as well as making only a limited contribution to growth. Meanwhile, arguments over the level of ambition shown in the UK-EU reset are intensifying, as UK stakeholders advocating for ambition increasingly hear frustration from [...]

By |2024-12-18T14:44:55+00:0019 November 2024|Blog, UK - Non EU|0 Comments
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Is the WTO really a Dead Parrot?

Peter Holmes is a Fellow of the UK Trade Policy Observatory and Emeritus Reader in Economics at the University of Sussex Business School. The 2024 World Trade Organization (WTO) Public Forum was sure to be a fascinating occasion given the interest in the topic, inclusivity and green trade, and the stellar cast of speakers. But what of the future of the WTO itself? Many observers have come to feel that with the negotiating function and the Appellate Body (AB) both log-jammed, there wasn’t much for the WTO to do apart from hosting events like the Public Forum. Despite the logjam in negotiations and the apparent death (certainly more than a very deep sleep) of the Appellate Body, the WTO is still delivering value to its members in its routine committee work. It continues to promote transparency etc, and Dispute Settlement Panels still operate, though more like the way they did in the GATT era. Among DS nerds there was sympathy for the idea put forward by Sunayana Sasmal and me[1] that concerns over judicial overreach could be assuaged if the AB (if there were one) could decline to rule if the law was genuinely unclear. But as several Indian experts told [...]

By |2024-11-19T11:43:32+00:004 October 2024|UK - Non EU|0 Comments
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Do developing countries have a say? What the green subsidies race tells us about the future of geoeconomics.

Ana Peres is a Lecturer in Law at the University of Sussex and a member of the UKTPO. Lawyers, economists and political scientists are increasingly using a new term to frame discussions on current trade relations and policies: geoeconomics. This means that countries are intervening in strategic economic sectors not primarily for profit but to ensure autonomy, build resilient supply chains and secure access to valuable capabilities. Such approach contrasts with the ideals of free trade, market access and interdependence that shaped international trade for decades. These traditional ideals, even when supported by a so-called ‘rules-based system’, always posed challenges for developing countries to meet their objectives. So, what does geoeconomics mean for developing countries? Unfortunately, it threatens to sideline them even more. Consider one of the main areas where geoeconomic strategies are at play: the development of clean technologies. Governments are implementing industrial policies to secure access to critical raw materials, an input for electric batteries, and to protect domestic production of electric vehicles (EVs). Such policies often require substantial subsidies. Recent discussions at the WTO Public Forum highlighted that a clear distinction between “bad” and “good” subsidies is not only desirable but essential to deal with many of the new [...]

By |2024-11-19T11:41:21+00:0027 September 2024|UK - Non EU, UK- EU|0 Comments
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