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Your guide to what Trump’s second term means for Washington, business and the world
The writer is Senior Fellow for International Trade at the Council on Foreign Relations
Tariffs were the buzzword of 2025. US President Donald Trump, the self-proclaimed “Tariff Man,” stretched the limits of his authority to raise levies on allies and adversaries alike, bringing US tariffs to levels last seen in the 1930s. The haphazard way in which those tariffs were applied, paused, exempted, reinstated, and constantly threatened, had trading partners scrambling to secure “deals” to end the uncertainty.
After a year of chaos, the US Supreme Court reined in Trump’s actions, but much remains unsettled. Experts have largely focused on how Trump will rebuild his tariff wall with a patchwork of other trade authorities. But the administration’s trade strategy is hiding a more dangerous development in plain sight: the erosion of the rule of law in international trade altogether.
Just weeks after Trump’s tariffs were revoked, US trade representative Jamieson Greer announced new investigations into alleged unfair trade practices related to foreign excess capacity and production, as well as forced labour law enforcement under Section 301 of the Trade Act of 1974. Those investigations cover 60 US trading partners from Mexico to Algeria, accounting for the bulk of US trade with the world.
After significant usage in the 1980s, with results that did not live up to the hopes of the law’s drafters, Section 301 was sparingly used after the World Trade Organization’s stronger enforcement mechanism was established in 1995. With that option available, Section 301 investigations often led to the filing of a WTO complaint instead of unilateral action. However, soon after Trump first took office in 2017, Section 301 was resurrected, primarily to enact tariffs against China.
Fast forward to his second term, and it is clear that Section 301 will be back in focus, but this time, it could be much more prolific. This is because Trump’s previous trade representative, Robert Lighthizer, had a novel idea that his protégé, Greer, now seems eager to implement.
The idea emerged while Lighthizer was renegotiating the trade pact with Canada and Mexico. He sent a draft notice to Congress about how the new US-Mexico-Canada Agreement (USMCA) could be implemented. While this did not make it into the final implementing legislation, Lighthizer outlined how Section 301 could be used to enforce ostensible US rights even if dispute procedures existed in the USMCA.
He claimed that if formal dispute settlement channels were insufficient, “the USTR’s determination on whether the USMCA partner breached USMCA obligations or impaired US rights . . . would be based on the USTR’s evaluation of the relevant factual issues”. In other words, when it comes to settling disputes, the USTR could play the role of judge, jury and executioner.
With a flurry of Section 301 investigations under way, US trading partners should be deeply worried. Of the 19 deals the administration has negotiated since last summer, none have dispute settlement provisions. The US has also written off WTO dispute settlement since 2017, arguing that many of its trade actions are a matter of economic or national security and therefore out of bounds for WTO adjudication.
This means that when it comes to enforcing all those asymmetrical commitments that trading partners have made in their “reciprocal” trade deals, a neutral adjudication of whether there is a breach will no longer be possible. Instead, the US intends to decide when there is a breach, which facts to consider, and what the punishment will be.
This is a world of far more uncertainty than many US trading partners may have imagined. But more frightening is the inevitable reality that Washington is no longer pursuing a trading system based on the rule of law, but on the rule of US power alone. America’s trading partners will need to limit the scope of those commitments and seek reciprocal alternatives elsewhere.
