GENEVA (April 10): The European Union is warning allies that if President Donald Trump dismantles the World Trade Organization, it would create global havoc.
“It would be the rule of the jungle and only the most strong would survive,” EU trade chief Cecilia Malmstrom said in Tokyo, after Washington leveled a new tariff threat at the bloc. “And maybe not even them.”
Trump has called the WTO the “single worst trade deal ever made.” And while he would need congressional approval to follow through on a threat to leave, he’s already set in motion measures that could paralyze the organization’s ability to arbitrate disputes later this year.
The U.S. last year unilaterally imposed duties on foreign steel and aluminum and Trump has also threatened to hit European cars and auto parts with levies. On Monday, the Office of the U.S. Trade Representative said it was preparing tariffs on US$11 billion of imports from the EU, because of subsidies the bloc provided to Airbus SE.
The EU has started discussions aimed at reforming the WTO in an effort to appease U.S. concerns, but talks haven’t produced results yet.
“Without exaggerating, this is arguably the most important task we have in trade policy today,” Malmstrom said at a Japan Institute of International Affairs seminar. “The havoc we would see on the global arena without the WTO would bear very tangible costs and burdens for businesses.”