Could the world sue Trump over tariffs?
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Forever 35 is a running conversation between two good friends, me, Dori Shafrir. And me, Elise Hu. In this wild time to be alive, we're a show about the many ways we take care of ourselves. Sometimes that might mean upgrading our skincare routines. Or it might mean more rest. Or stretching. We talk about all of it. With each other and with our thoughtful and funny weekly guests.

Boundary making really is just a reflection of how you think about yourself. Cream blush is the best thing you could do for your life. How, Sway? You need to build my this for me. All right, so we aren't actually 35 anymore. But we are still the show called Forever 35. Find us wherever you listen. New episodes drop Mondays and Wednesdays. ACAST helps creators launch, grow, and monetize their podcasts everywhere. ACAST.com.

Welcome to The World in 10. In an increasingly uncertain world, this is The Times' daily podcast dedicated to global security. Today with me, Alex Dibble and Stuart Willey. As global markets react to Donald Trump's Liberation Day tariffs, there's real variation in how countries are responding to try and avoid economic harm.

For some, like here in Britain, it's wait and see. But others have vowed to fight what the European Union is calling a major blow to the world economy. China and Canada among those preparing to retaliate. Japan also worried. But rather than threatening tariffs in return, it's warning Trump's measures break the rules of global trade. Our guest today will help us understand what options countries may have beyond retaliatory tariffs. Dr Mona Paulson is an associate professor at...

at the London School of Economics and a specialist in trade and international economic law. Mona, Japan's Prime Minister says Donald Trump's move may break World Trade Organization rules as well as the trade deal between the US and Japan. Can Donald Trump effectively just rip up those agreements on a whim?

Hopefully not on a whim. Hopefully there's some thought to them. But yes, okay. So let me explain. So really, international law, you can imagine it as a framework, right? And there's lots of different ways or different layers, I think, to that framework. So we have at the international level, governments negotiate agreements between themselves, and that can be bilaterally. So an example, you know, to think about is sort of the United States agreement with South Korea.

It can also be regional, where several economies will come together and agree on particular rules governing trade and services and goods. So the North American Free Trade Agreement, now the United States-Mexico-Canada Agreement. And then finally, the multilateral level, sort of the big overarching umbrella for all this. And that is the World Trade Organization and the agreements that come under that purview. So what role does the World Trade Organization have when...

when countries get into disputes? And is Japan's Prime Minister right when he says Trump may be going against WTO rules? That is an agreement, a legal system, really, that was created after the Second World War. And it's a part of that sort of logic coming out of the Second World War with the International Monetary Fund and the World Bank, this desire to create

a global institution and a global set of roles. Now, they don't tell governments what they can and cannot do in terms of pursuing security or other public policies.

But they sort of set baselines in terms of seeking to not discriminate between goods that come from one trading partner versus another, not to discriminate between your own domestic products and that of a foreign product. So that when you walk into a supermarket, you're trying to buy the best quality or the one that suits your budget, but not necessarily because of where it came from.

The other aspect of this, of course, is also how governments set agreements between themselves, almost like a balancing of scales where they open up markets in exchange for another economy's opening a market. So you negotiate how you restrict trade in a sort of very, in a very organized, calculated way where you can have border measures like tariffs that are set on particular goods and you agree to eventually through negotiations ratchet those down and

So what we have right now with these tariff policies from the United States is in breach of those commitments, both at the WTO level right now and through various trade agreements like the USMCA, where the United States is clearly imposing tariffs beyond their commitments.

And in doing so, they're supposed to go through a rebalancing process, but they're not. They're just sort of raising their tariffs. And it's predominantly been tariffs that we've seen. But there are lots of ways, of course, that governments can restrict trade, both at the border and also once a good is inside a territory. As you say, some alleged breaches of those commitments. Does this mean a legal challenge could be a slam dunk?

Right. So we have seen various governments already to bring disputes to the World Trade Organization. So Canada and the European Union. China has also brought disputes with respect to United States policies right now. And so why I said why I said alleged is that they haven't been

technically reviewed yet to determine legality. But obviously, you know, you can sort of make a call based on looking at what the actions have done in terms of have they gone past the bounds of what the United States committed to or not.

We've seen this period just in the first few months where tariffs are threatened, tariffs are imposed, tariffs are pulled back. And there are lots of theories going around as to why this sort of inconsistency exists. And some of it is to do with the belief that these are leverage points. These are negotiating points. You sort of hit hard and then begin to negotiate things.

Some of them are also with respect to the United States' own perspective of seeking to replace income tax with external revenue from tariffs. And so the mix of these makes it very complicated because, in fact, some of these views contradict one another. But yes, governments have broad disputes. This, of course, depends upon the viability of the WTO dispute settlement mechanism. And as I'm sure you've heard before,

There is supposed to be an appellate review that could give a final assessment. That current appellate body mechanism doesn't exist. So now any government that has not signed up to some of the alternative workarounds that have been put into place,

can block a report they disagree with. And this is, of course, what we've seen from the United States since 2019. So in the past, we've already had review of United States security measures taken to protect security interests through trade action.

They weren't able to justify their actions based on the security exceptions that are available at the WTO. And the response from the United States was our assessment of when we invoke security for trade actions is not subject to review. And therefore, they appealed essentially into the void. That's how it's called, the WTO, basically preventing some of the countries that had brought the cases from implementing and enforcing security.

their their rights through the WTO system. Is there a worry that with the US saying these tariffs, they're about security, and blocking new members of that appellate body, we end up with a toothless WTO? I don't think they're toothless. I think that this comes down to sort of what what is the role of international law and international trade law at the moment.

I think it's still incredibly important for governments to continue to use the multilateral system to bring disputes, to challenge the United States that is still a member of the World Trade Organization to say you have acted in compliance with your commitments and your rights.

To the extent that they are not able legally through the system to retaliate, this creates a lot of potential problems. If a government wants to retaliate and they want to do so quickly in response to United States tariffs with their own counter tariffs, right, to sort of stop the war from trade war, so-called trade war from escalating.

governments may not want to wait for two years. So in fact, we see different governments taking different approaches. Canada, for example, they have imposed response immediately while also bringing a dispute. The European Union has argued that these are safeguards to protect United States interests. And through the safeguards agreement, they are able to respond right away. Now,

The United States is not actually calling their measures safeguard measures. They're saying they're security measures to the extent that it's with respect to autos and steel and aluminum. So there are all these different responses. Some governments are not yet responding to either with either a dispute or with retaliation. But in terms of is it toothless?

I don't think so. I think it's important to have those engagements to participate, to ask the United States to justify its actions within the community of international members that are participating. Mona, are there any remedies in these disputes, perhaps punishments that could be leveraged against the United States?

I mean, this is a community of sovereign states, right? And to that extent, it doesn't operate in terms of punishment. The way that I explain to my students how the World Trade Organization works is that ultimately, if the remedies for a WTO dispute are not punitive or compensatory damages in the same way you would see in a domestic court,

How it works is, is that if a government action is seen as inconsistent with WTO rules, the remedy is to bring themselves back into compliance. So you try to get back to that sense of equilibrium. What happens is, is that normally, if a government doesn't bring their measure back into compliance, they just say, sorry, we hear you, but we don't want to change anything.

Then there's an opportunity for the member that brought the complaint to impose sort of temporary concessions where either they take away market access from the member to sort of again rebalance, or they seek from that member concessions in another sector to again rebalance because it's all about those scales. If the U.S. blocks, they're in effect saying, we don't want to participate with that process.

And so that is a bigger position of sort of distancing themselves from other economies and willing to engage. And it might be that they do so because they want to negotiate bilaterally. It may be that they have no interest in that negotiation at all. It may be that with some partners they're willing, with others not. So we don't have the full answers for that.

Mona, thank you. That is Dr. Mona Paulson from the London School of Economics, who is a trade and international economic law specialist. That's it from us. Thank you for taking 10 minutes to stay on top of the world with the help of The Times. See you tomorrow.

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Forever 35 is a running conversation between two good friends, me, Dori Shafrir. And me, Elise Hu. In this wild time to be alive, we're a show about the many ways we take care of ourselves. Sometimes that might mean upgrading our skincare routines. Or it might mean more rest. Or stretching. We talk about all of it. With each other and with our thoughtful and funny weekly guests.

Boundary making really is just a reflection of how you think about yourself. Cream blush is the best thing you could do for your life. How, Sway? You need to build my this for me. All right, so we aren't actually 35 anymore. But we are still the show called Forever 35. Find us wherever you listen. New episodes drop Mondays and Wednesdays. ACAST helps creators launch, grow, and monetize their podcasts everywhere. ACAST.com.