Trump’s tariffs reveal the hidden fault lines of global trade

Today, double-digit tariffs imposed by the United States are the new baseline. Breaking decades of low single digits norms, the US rolled out a “reciprocal tariff” framework in April 2025, setting a 10 per cent baseline and layering on higher rates for specific countries.Embedded in the US’ national security strategy, this reorientation leaves little scope for a full rollback and turns global trade into a test of power: of whether World Trade Organization (WTO) rules still bind or leverage now sets the terms.For China and the rest of Asia, the change is more consequential. For decades, globalisation dominated international trade through market interdependence regulated by multilateral institutions like the WTO. Between 1990 and 2017, developing economies’ share of global exports nearly doubled, from 16 per cent to 30 per cent, with China emerging as the world’s largest goods exporter and the anchor of Asian supply chains.That model, however, is becoming difficult to sustain during the era of US President Donald Trump. Unlike earlier protectionist episodes, today’s tariffs are fused with technology controls, geopolitical rivalry and expansive national security claims, making them far harder to reverse once entrenched.The US is not abandoning WTO rules. Instead, it is orchestrating a far bolder strategy, letting power politics override discipline and opening legal grey zones that unleash uncertainty. Steel and aluminium tariffs under Section 232 of the US Trade Expansion Act invoked national security exceptions, prompting warnings from other WTO members that expansive use of security carve-outs could hollow out core obligations.The same logic now extends to technology. Semiconductor export controls on China rely on security exceptions to WTO rules not designed to manage peacetime technological rivalry. China has challenged these measures at the WTO.