An alliance for open trade: How to counter Trump's tariffs

Julian Hinz, Keith Head, Isabelle Méjean, Emanuel Ornelas and Moritz Schularick

No 194, Kiel Policy Brief from Kiel Institute for the World Economy (IfW Kiel)

Abstract: Trump's renewed tariffs on traditional allies-including the EU, Canada, Mexico, and Brazil-signal a return to aggressive protectionism, openly disregarding WTO rules and threatening the stability of the global trade system. The authors argue that unilateral retaliation by individual countries is unlikely to be effective; instead, only a coordinated response by a broad coalition of affected nations-such as the EU, Canada, Mexico, Brazil, and South Korea-can exert meaningful economic pressure on the United States. This policy brief proposes that such a joint response should remain WTO-compliant, target politically sensitive sectors of the U.S. economy (including automobiles, pharmaceuticals, and agriculture), and be framed not as punitive, but as a principled defense of the rules-based international trade order. Timely and coordinated action is critical, as further delays risk deepening fragmentation and inflicting long-term damage on the multilateral trading system.

Keywords: US trade policy; tariff policy; trade war; free trade; US-Handelspolitik; Zollpolitik; Trump; Handelskrieg; Freihandel (search for similar items in EconPapers)
Date: 2025
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