Amidst a breakdown in the global trading system, more dispute resolution bodies and arrangements are coming into being as viable alternatives to the established institutions of old. Yet even in the newly emerging trading landscape the United States maintains an advantage, writes Ekaterina Knyazkina, Junior Research Fellow, Institute for International Studies, MGIMO University
The opening stages of the Trump presidency brought the world to the brink of a large-scale trade war. Since February 2025, additional tariffs were imposed on almost all US imports: a base rate of 10% on 185 countries, with further surcharges for those maintaining a positive trade balance with the United States. These measures were introduced under the International Emergency Economic Powers Act (IEEPA). However, when it comes to each trading partner, the administration cited specific reasons for the application of measures alongside the overarching objective (potentially—abolition of the income tax), ranging from trade deficits to drug trafficking, corruption and tech leaks.
Trading partners expressed disagreement with America’s decisions, a number of them turning to the World Trade Organization (WTO) and using the established dispute settlement mechanism. Between February and April, China submitted requests to the WTO Dispute Settlement Body (DSB) for consultations concerning the following US actions: (1) the application of extra 10% tariffs; (2) the subsequent increase of extra tariffs on China to 20%; and (3) the application of an additional country-specific tariff of 34%.
In March and April, Canada submitted requests to the WTO DSB for consultations with the United States concerning: (1) additional tariffs of 25% on non-energy goods and 10% on energy goods; (2) additional tariffs on imports of certain aluminium and steel products; and (3) additional tariffs of 25% on automobiles and automotive parts.
In August, Brazil submitted a request to the WTO DSB for consultations concerning the United States applying additional import tariffs of 10% and their subsequent increase for all imports from Brazil to 50%.
All requests alleged violations of the most-favoured-nation regime at the hands of the United States. China also claimed violations of customs valuation procedures, principles governing the application of trade rules, and the prohibition of export subsidies. Canada alleged violations of transit rules and the collection of customs penalties, while Brazil pointed to the need for dispute resolution through the WTO.
The dispute settlement procedure within the WTO DSB is regulated by the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU). Under the DSU, the first stage of dispute consideration in the WTO consists of consultations, allowing the parties to reach a mutually acceptable solution without resorting to formal dispute settlement proceedings. A significant proportion of WTO complaints do not progress to the procedure of formal dispute settlement, as the parties reach an agreement during consultations or the initiating party decides, for various reasons, not to move to subsequent stages.
The United States responded to all requests within the timeframe set by the DSU. However, official information on the outcomes of the consultations is unavailable, as the WTO does not publish such data. It is nevertheless known that none of the countries requested the establishment of a panel following the consultations. The possible reasons for this are as follows.
In responding to China’s requests, the United States noted that China had unilaterally (that is, without any findings by the WTO DSB) deemed US actions to be in violation of WTO agreements and had adopted retaliatory measures: the introduction of a 10% tariff on imports of oil and agricultural machinery; a 15% tariff on imports of liquefied natural gas and coal; the imposition of export controls on materials containing tungsten, tellurium, ruthenium and molybdenum; the inclusion of several companies on the unreliable entities list; and the launch of an antitrust investigation into Google. In other words, China’s actions also display signs of violating WTO agreement clauses. China’s decision not to request the establishment of a panel is likely linked to the trade negotiations with the United States that followed the consultations and resulted in a trade deal. This outcome received high praise from WTO Director-General N. Okonjo-Iweala, who stated that an escalation of the conflict would have led to an 80% reduction in bilateral trade between the United States and China, with macroeconomic fallout spreading to other economies. Following several rounds of negotiations, China and the United States reduced mutual tariffs and extended the “trade deal” for one more year.
In responding to Canada’s requests, the United States pointed to Canada’s unilateral application (without a WTO DSB decision) of additional tariffs of 25% as a retaliatory measure. The European Union requested to participate as a third party in the consultations concerning tariffs on aluminium and steel, but the United States rejected this request. As in the case of China, the United States entered into trade negotiations with Canada, which were nevertheless repeatedly suspended due to Canada’s introduction of additional taxes on a number of US companies and the release of a Canadian advertisement criticising the tariffs. However, Canada has not initiated the establishment of a panel within the WTO DSB, instead working to increase exports to other countries: an agreement with the UAE has already been signed, and negotiations with India resumed.
In its response to Brazil’s request, the United States did not claim the application of retaliatory measures, merely pointing to the lack of justification for Brazil’s position. As in the cases of China and Canada, the WTO complaint was followed by trade negotiations, whose dynamics appear more positive than in the Canadian case. Despite their later start, the United States has already removed the 10% tariff on a number of Brazilian goods, and both sides have stated their intention to continue negotiations.
Thus, countries are giving preference to negotiations rather than litigation. What also points towards this conclusion is certain US trading partners (for example, Vietnam) entering into negotiations without WTO consultations, as well as requests for negotiations being received from 18 countries. As is well known, the work of the WTO DSB Appellate Body is paralysed, and in the event of dissatisfaction with a panel ruling, parties will not have the opportunity to file an appeal. Moreover, WTO practice in disputes concerning the application of measures in the interests of national security (an argument invoked by the United States) has only just begun to develop. Thus, the recourse by China, Canada and Brazil to the WTO DSB appears to be a means of drawing the United States into trade negotiations—where faster results can be expected. By comparison, without taking appeals into account, dispute settlement within the WTO DSB may take up to one year, whereas the first positive results of negotiations with China were achieved three months after China’s WTO complaint, and the first positive contacts with Brazil took place two months after Brazil’s complaint.
However, only the negotiating parties themselves can assess the extent to which the outcomes of these negotiations are acceptable in practice. For example, the trade deal between the United States and China provides for mutual tariff reductions, but tariffs on China remain higher than those applied to the United States. When it comes to Brazil, the United States did remove a number of tariffs, but a full return to the pre-February 2025 conditions is unlikely, and the issue will probably come down to the concessions required of Brazil in order to soften trade conditions. In regards to Canada, what sides discussed was the easing of tariffs, not their elimination. For Canada, a return to WTO litigation appears to be an unlikely alternative course in light of the non-functioning Appellate Body, and returning the issue to a quasi-judicial framework would hardly be welcomed by the United States.
Overall, an alternative to the WTO DSB Appellate Body does exist. In 2022, 47 WTO members established the Multi-Party Interim Appeal Arbitration Arrangement (MPIA) in accordance with the WTO DSU. Under the MPIA, participating parties independently review WTO DSB decisions that would otherwise have been considered by the Appellate Body. The MPIA finds its basis in the principles of the WTO Appellate Body, and it is intended to be dismantled should the latter resume its work. The MPIA includes major economies, developing and least developed countries, which together account for more than 60% of global trade by value (2024). This confirms that international trade participants do remain interested in preserving the core principles of the WTO amid turbulence in global trade.
In November 2025, for the first time, a full dispute settlement process was completed using the MPIA instead of the WTO DSB Appellate Body, with the MPIA report being adopted by the panel. China, Canada and Brazil are participants in the MPIA; however, the United States has not joined the arrangement, meaning that this mechanism cannot be utilized in disputes with the United States.
Thus, under current conditions, trade negotiations appear to be the fastest and most effective means of resolving disagreements provoked by Trump’s trade policy. The existing configuration is advantageous for the United States, as negotiations are the only viable path: they allow Washington to pursue any favourable terms, whereas a WTO DSB ruling is unequivocal and implies either the maintenance or the removal of disputed measures. It appears that whatever concessions Trump may agree to in negotiations, the economic interests of the United States will remain firmly secured.
The Valdai Discussion Club was established in 2004. It is named after Lake Valdai, which is located close to Veliky Novgorod, where the Club’s first meeting took place.
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