US tariffs: It’s time to find a path forward
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The path to re-establishing a multilateral system of rules that includes the United States is to re-examine where the current rules have fallen short, at least from the US perspective, and take action to address the shortcomings as appropriate.
By Dan Mullaney
From one perspective, “Liberation Day” (April 4, 2025), when the Trump administration imposed tariff levels not seen for 90 years – was the day the dam finally burst from long pent-up unaddressed US trade concerns. The international trading rules and system had proven rigid and inflexible in the face of consistent, long-standing and mounting US complaints about trading partners’ tariff and non-tariff barriers and about the non-market economy tilt to the trade playing field. As the dam burst, the current administration called a halt to the low and non-discriminatory “MFN” tariffs it had applied since the General Agreement on Tariffs and Trade in 1947 – tariff obligations that the US believed had taken away US leverage to negotiate — and unilaterally decided to offset those barriers and uneven playing field with high tariffs.
The multilateral system has not been erased: both the international trading rules and the US objectives of eliminating trade barriers and addressing non-market economy policies and practices remain. If there is a desire to re-establish international trading rules, and if that system is to include the United States, then it may be important to make those trading rules function better to address legitimate US concerns. The key can be found in the many provisions of the US-EU framework agreement that do not address tariffs, as well as the bilateral agreements with other trading partners that followed, which elaborated on the issues and concerns.
The US-EU Agreement lays out numerous obligations to address unnecessary regulatory barriers to trade and investment, both with respect to particular sectors and regulations and more generally – for instance, committing to enhanced cooperation to develop common standards for the transatlantic marketplace and to facilitate product testing. It addresses the reduction of non-tariff barriers to food and agricultural products, unjustified digital trade barriers, and the enforcement of internationally recognized labor rights. It also includes provisions on cooperation vis-à-vis non-market economy policies and practices and supply chains, among many other provisions.
These are long-standing US objectives, and ones that the EU generally shares, at least in theory, but which have not been achieved despite years and sometimes decades of effort.
Other US bilateral agreements in 2025 are also relevant and revealing
Switzerland’s agreement provides for the application of the WTO Decision of the Technical Barriers to Trade Committee on Principles for the Development of International Standards, Guides and Recommendations (2000). This decision recognizes that international standards (which give rise to a presumption of conformity with WTO international trade obligations) are the result of an open and consensus-based process, not limited to particular standards development organizations. These include standards on which US standards and regulations are based, but which the EU does not recognize as international. This puts US products at a disadvantage in the EU. Notably, the US-EU agreement does not contain this provision, suggesting that removing this barrier is at best a work in progress.
Also of concern, despite the commitment in the bilateral agreement to address unjustified digital trade barriers, are the numerous assurances from various EU officials that discussions with the US on the Digital Markets Act or the Digital Services Act are off the table because they would interfere with the EU’s “regulatory sovereignty.” The WTO Agreement contains requirements that Members notify measures that impact trade, allow Members to comment on those measures and take those comments into account. See, e.g., Article 2.9 of the WTO Agreement on Technical Barriers to Trade. This includes how those measures are enforced. Far from an assault on “regulatory sovereignty,” this is the very process by which the WTO avoids conflict and helps remove unnecessary trade barriers. Ideally, concerns about the DMA and the DSA and other digital measures would be the subject of bilateral discussions, not insulated from them on “sovereignty” grounds.
Further, both the Malaysian and the Cambodian Agreements contain provisions that protect the ability of US agricultural producers to use common food and agricultural terms in those markets. They also require transparency, fairness, and rigor in the protection of “geographical indications” (GIs), like “Parmigiano Reggiano,” for food products whose quality, reputation, or other characteristic is attributable to its geographic origin.
“The EU might tout that the recently agreed EU-Mercosur agreement will stop the sale in Brazil of non-European parmesan”
These provisions are there because the EU systematically presses its trading partners to stop anyone from using terms that even “evoke” any one of hundreds of food names that the EU unilaterally considers to be its GIs. That is, beyond securing access for its products in its trading partners, the EU actively prevents other countries, like the United States, from shipping its products under names that are recognized as common names outside of Europe. The EU might tout that the recently agreed EU-Mercosur agreement will stop the sale in Brazil of non-European parmesan; it’s less clear whether that would be a welcome development for this Administration.
Nor is this approach an anomaly. The EU’s agreement with the UK calls for “dynamic alignment” with the EU on food-related sanitary and phytosanitary (SPS) measures. This means that not only is the EU securing access for its products in the UK (and vice versa), it is also actively exporting its own agricultural trade barriers to the UK, blocking US access to the UK market. Other EU agreements do the same, including with respect to industrial product regulations.
Many in the EU over the years have heralded the “Brussels Effect,” under which, because of its market power and regulation-forward approach, Brussels asserts itself as the standard setter for the world. Brussels has been, effectively and proudly, creating global rules, with – as suggested by the EU approach to the DSA and the DMA — little or no input from trading partners.
“It is fair and perhaps wise to consider whether non-EU trading partners like the United States are as thrilled at that prospect as the EU has been”
The United States and the EU have been working for decades to find a way to address these non-tariff barriers to bilateral trade, including their spill-over impacts on joint third country markets, and to coordinate on non-market policies and practices. Those efforts included a huge multi-year effort to negotiate a comprehensive agreement, the Transatlantic Trade and Investment Partnership (TTIP), that would have addressed virtually all of these issue. The efforts also included follow-on initiatives over two administrations – Trump 1 and Biden — to address these issues on a narrower basis, after the EU concluded that it would not move forward on TTIP.
Those efforts failed, in no small part due to rigidities in the institutions and inflexible and narrow interpretation of international rules. The failure of the General Arrangement on Steel and Aluminum negotiations – which should have resulted in an agreement to incentivize bilateral trade in sustainable and market economy steel — is a case in point. These efforts also failed from a lack of any sense of urgency, the belief that the old and inflexible ways would prove strong enough to prevail against the mounting new challenges and were not at risk.
Now that it is clear that this rigidity is a weakness, not a strength, and that the situation is truly urgent, it is time to revisit those rules and approaches and find a path forward.
The same applies to the World Trade Organization as an institution. The US communication on WTO reform [WT/GC/W/984], recently circulated in the WTO General Council on December 15, 2025, advocates strongly for numerous reforms aimed at making the institution more sustainable and relevant. Space limits do not permit a full discussion here, but WTO Members should pay close attention to it.
Conclusion
The agreed rules of the multilateral system have for decades been a source of strength for both the United States and its allies. But to be sustainable, the rules need to continue delivering benefits to their participants, even as circumstances change. That a major participant believes that the system has not done so is a fundamental problem that must be addressed if there is any hope of restoring a system of multilateral rules and alliances. Or at least one that includes the United States. To be clear, the United States is almost certainly weakening itself by alienating allies and pulling away from a multilateral system that it helped create. But the US administration apparently believes that staying in a rigid system that did not deliver needed outcomes was weakening it more, and acted accordingly.
The path to re-establishing a multilateral system of rules that includes the United States is to re-examine where the current rules have fallen short, at least from the US perspective, and take action to address the shortcomings as appropriate. The immediate vehicle to do so is to examine closely the set of bilateral framework agreements reached in 2025, which offer a clear roadmap for what should be done, and to use those to negotiate rules and outcomes that address the current challenges.
About the author:
L. Daniel Mullaney is a nonresident senior fellow with the Atlantic Council’s Europe Center and GeoEconomics Center. Most recently, he served as assistant US trade representative (AUSTR) for Europe and the Middle East in the Office of the United States Trade Representative (USTR) from 2010 to 2023. Before assuming the post of AUSTR, he served as senior trade representative in the US Mission to the European Union in Brussels.