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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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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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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