Category: Trade (page 1 of 2)

US Tariffs Threaten International Law but Could Save Free Trade

By Prof. David Collins

President Trump’s ‘Liberation Day’ tariff onslaught could inflict the most significant shock to international trade of all time. Markets have already collapsed and recessions around the world, including in the US, are feared. Economists are in near-unanimous agreement that the sudden 20% (on average) charge on trade with the world’s largest economy, plus 25% on automobiles, are a strategic error on the part of the White House. President Trump’s own economic advisors struggle to justify them. Some in the Republic party are even breaking ranks, pleading with the president that American consumers will be worse off by thousands of dollars a year, languishing under inflation and a drop in GDP by up to 3%. While it has attracted limited attention from the media, the tariffs are almost certainly illegal, breaching the US’s commitments under the General Agreement on Tariffs and Trade (GATT) and various bilateral trade agreements, including the United States Mexico Canada Agreement (USMCA) although Mexico and Canada were omitted from Liberation Day measures.

As harmful as the US’s sweeping tariffs are on their own, worse damage could be inflicted via retaliation, even if Trump were not to escalate with further counter-tariffs, which is unlikely. The EU, China and others are already planning a suite of measures. But a tariff is a tariff, whether or not it is morally justified. It will only raise costs of US imports more, forcing consumers to switch to alternatives which will in turn become dearer in their scarcity. Countries with large trade surpluses with the US (like the EU and China) will find retaliation unhelpful as a weapon of persuasion – we are not in the 1930s. Another danger is the looming spectre of dumping. A glut of goods that would have been shipped to the US, especially from mega-manufacturer China will now end up elsewhere. Anti-dumping duties, yet again tariffs, may end up being levied to head-off this surge.

The UK, seemingly wisely, is holding off on tariff retaliation against the US. Having been hit with ‘only’ a 10% tariff by the Americans (notwithstanding the car, steel and aluminium tariffs at 25%), the UK has fared better than the EU, which faces a 20% Trump tariff. Many have been quick to present this as a ‘Brexit dividend’ – but while a lower tariff is always better than a higher one, it is unlikely that the cross-Channel differential will spur a manufacturing boom in the UK as European firms rush to locate production here as a way of lowering the costs of entry to the US. Supply chains do not re-orient overnight and White House policy can turn on a dime – the UK could just as easily get thumped in the next round.

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The WTO dispute between China and EU over Chinese SEPs global rate-setting

By Enrico Bonadio and Federico Manstretta at Parma University, IP Law Galli

Back in January 2025, the EU initiated consultations at the World Trade Organization (WTO) to challenge the practice of Chinese courts to unilaterally set binding global royalty rates for non-Chinese standard essential patents (SEPs) without the consent of the parties to the litigation. According to the EU Commission press release, this unfairly pressures European high-tech companies to lower their royalty rates worldwide, granting Chinese manufacturers cheaper access to European technologies. Additionally, the EU claims this approach interferes with the jurisdiction of EU courts over patent matters and violates WTO rules, including transparency obligations under the TRIPS Agreement.

The initial 60 days term given to the parties to find a satisfactory solution in the WTO consultations stage has expired, and the EU could then request a panel to be appointed to hear the case.

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North American Tariff War has Dark Implications for International Trade Law

By Prof. David Collins

The recent announcement of sweeping tariffs by US President Donald Trump on imports from Canada, Mexico, and China has ignited a global trade conflict with far-reaching implications. President Trump’s decision to impose a 25% tariff on most Canadian and Mexican goods, with a 10% tariff on Canadian energy resources, and an additional 10% on Chinese imports, marks a significant departure from the longstanding free trade relationship between the two nations. In response to the US tariff threat, Canada announced retaliatory measures, planning to impose 25% targeted tariffs on $155 billion worth of US imports.

While a temporary reprieve has been granted for both Canada and Mexico, it is not clear that the tariffs will not eventually be imposed, as they have been on China, potentially violating the US’s commitments under international treaties. All four countries, as WTO members, are bound not to raise tariffs beyond their committed levels under Article II of the General Agreement on Tariffs and Trade (GATT). Article I of GATT further requires countries not to treat imports from different WTO members differently with respect to tariffs. Article 2.4 of the United States-Mexico-Canada Agreement (USMCA), which replaced the North American Free Trade Agreement (NAFTA) prevents those three parties from increasing tariffs.

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The ‘sidelining’ of the European Parliament from the EU-US Trade and Technology Council (TTC): TTC(s) as post-Democracy Divas or Disasters?

Professor Elaine Fahey, Institute for the Study of European Law, City Law School, City, University of London

The EU-US Trade and Technology Council (TTC)

Transatlantic Trade and Technology Council (TTC) has been set up quickly by the European Union (EU) with the US at the outset of the US Biden administration. It is not a trade negotiation and does not adhere to any specific Article 218 TFEU procedure, although it has many signature ‘EU’ characteristics. The TTC has high-minded goals to ‘solve’ global challenges on trade and technology with its most significant third country cooperating partner.  Yet it is notably not the only recent Council proposed by the EU- there is also a new EU-India Trade and Technology Council. These new Councils represent a new modus operandi for the EU to engage with ‘complex’ partners, comprising executive to executive engagement, meeting agency counterparts regularly in close groups in an era of EU trade policy deepening its stakeholder and civil society ambit overall. The TTC has a vast range of policy-making activities, traversing many areas of EU law.  Their precise selection and future is difficult to understand in EU regional trade and data policy, seemingly pivoting, like US trade law, to executive-led soft law.

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Sunak’s Windsor Compromise

David Collins

The Windsor Framework (WF) concluded between the UK and EU to resolve the difficulties associated with the Irish Border reflects a significant compromise, with the UK giving the most ground. The brainchild of a more pliant and technocratic Prime Minister than his two predecessors, Rishi Sunak’s WF is in many respects an agreement that should never have been needed. The new arrangement essentially compels the EU to do what it should have done under the original Northern Ireland Protocol, i.e. impose no unreasonable barriers to trade between Great Britain (GB) and Northern Ireland (NI) while maintaining sufficient safeguards that its Single Market would not be flooded with UK goods.

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The EU and its Member States’ Joint Participation in International Agreements

Three academics from The City Law School – Elaine Fahey, Panos Koutrakos and Jed Odermatt – have contributed to a new edited volume The EU and its Member States’ Joint Participation in International Agreements (Hart 2022). The volume is based on contributions presented at a workshop held at the University of Geneva in November 2020.

EU law has developed a unique and complex system under which the Union and its Member States can both act under international law, separately, jointly or in parallel. International law was not set up to deal with such complex and hybrid arrangements, which raise questions under both international and EU law. Thie book assesses how EU law has been adapted to cope with the constraints of international law in situations in which the EU and its Member States act jointly in relations with other States and international organisations. Each chapter was jointly written by a team of two authors. The various contributions offer new insights into the tension that continues to exist between EU and international law obligations in relation to the (joint) participation of the EU and its Member States in international agreements.

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The “Renaissance” of the EU-US Trade Relationship: Tensions and Progress in a Fast-Moving Digital World

Giulio Kowalski

The EU-US trade partnership is the largest bilateral trade and investment relationship between the largest economies in the world (the EU economy accounts for 25.1% of global GDP and the US one represents 21.6%). Although bilateral, the EU-US trade partnership heavily impacts the global economy given that the EU or the US (or both) are the most important business partners for most countries worldwide. Furthermore, although the role of China as the EU’s import source for goods has greatly expanded in the last years, the US remains the EU’s largest trade and investment partner.

After the tensions characterizing the “Trump era” (e.g., US tariffs imposed on EU steel and aluminium recently suspended for a two-year period), the EU-US partnership on trade seems to be experiencing its “Renaissance”. The new Biden administration may provide a chance for a renovated transatlantic partnership, centred on cooperation over global challenges such as climate change and the concerns originating from the digitalisation of the economy. With regard to the latter issue, the EU-US Trade and Technology Council (EU-US TTC), established in June 2021 following an EU-US Summit, proves the improvement in the EU-US relation. In particular, one of the Council’s main goals is to strengthen the EU-US global cooperation on technology, digital issues and supply chains. The summit served to reiterate the EU-US commitment over the reform of the WTO’s negotiating function and dispute settlement system. Nonetheless, as will be extensively illustrated in the following, tensions do not seem to have been dispelled completely (e.g., the suspension of aluminium and steel tariffs is only temporary).
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Introducing “Understanding the EU as a Good Global Governance Actor” – a forthcoming edited collection with Edward Elgar Publishing

Elaine Fahey and Isabella Mancini

“Understanding the EU as a Good Global Governance Actor: ambitions, direction and values” is the provisional title of a book project forthcoming with Edward Elgar in 2022 and edited by (Elaine Fahey City Law School) and Isabella Mancini (City Law School/ Brunel Law School).

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Legal Challenges Faced by Coastal and Fishing Communities, Brexit and the New British Fisheries Policy

Dr Jonatan Echebarria Fernández (City Law School), Dr Tafsir Matin Johansson (World Maritime University) and Mr Mitchell Lennan (University of Strathclyde)

On Tuesday 8 June 2021, eleven leading experts from academia, the fishing industry, and international organisations gathered at an online workshop to discuss the legal challenges presented by Brexit and fisheries. The workshop was organised as part of the City Law School Higher Education Innovation Fund (HEIF) funded project “Legal challenges faced by coastal and fishing communities and the new British Fisheries Policy”. The project is led by Dr Jonatan Echebarria Fernández of City Law School (Principal Investigator), Dr Tafsir Matin Johansson of World Maritime University (Senior Expert Consultant) and Mr Mitchell Lennan of the University of Strathclyde (Impact Assistant).

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The EU Perspective on Labour and Social Standards in the EU-UK TCA: Reality and Expectations

Tamara Hervey

This blog post provides an early analysis of the ‘non-regression’ provisions on Labour and Social Standards in the EU-UK Trade and Cooperation Agreement (TCA). After considering the ‘non-regression’ provisions in the context of the TCA as a whole, it contrasts the provisions with measures of EU law. It then turns to elaborate the content of the provisions. Finally, some aspects of their enforcement are discussed.

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