April 3, 2025
Published in
The World
Gonzalo Villalta Puig
Full Professor of International Public Law of the University of Navarra
It is ironic that Donald Trump's second presidency has designated April 2, 2025 as Liberation Day, for marking the date of the unilateral tariff hike by the United States, retreating behind the walls of isolationism and protectionism.
Raising tariffs is the opposite of liberation, if we understand liberation as an expression of freedom. Economic freedom requires the removal of state intervention in the economic agency of the citizen. Free trade, the basic principle of economic freedom, demands, therefore, the removal of barriers to the free movement of goods and services. This freedom is exercised in the service of the common good, because in the free movement between free markets lies the basis for the prosperity of the individual and the community.
The explanation is simple: with the removal of fiscal and non-fiscal barriers to entrance , countries tend to specialize in what they produce better and in a differentiated way, taking advantage of their comparative advantages (from their climate to the size of their population). With this efficiency, the individual benefits as a consumer -who will be able to access higher quality at lower prices- and the community benefits as a market, enriched by the savings reinvested by the consumer. With prosperity comes peace, hand in hand with the interdependence between countries brought about by economic integration.
In economic terms, in the long term, no protectionist policy is defensible, as the recent falls in the world's main stock markets suggest. And in legal terms, neither. At the multilateral level, unilateral tariff hikes run counter to the international rule of law and the principle of non-discriminatory trade, as established by the General agreement on Tariffs and Trade and the other World Trade Organization (WTO) treaties. When the United States acceded to the WTO, it committed itself to respect relatively low tariff brackets, which it is now allegedly violating by raising tariffs above what it had committed to. And the WTO - to which the countries affected by the increases could appeal - no longer has a functioning Appellate Body, as its vacancies have not been filled, partly due to the U.S. civil service examination .
At the bilateral level, unilateral tariff hikes would contravene, in principle, the various free trade agreements that the United States has signed over the years, including, curiously, the treaty with Canada and Mexico -countries particularly affected by these hikes-, although this treaty was renegotiated during Trump's first term in office. The US presidency argues that it is forced to make these increases in defense of its national security, but this is a legally controversial justification and difficult to sustain among allied trading partners such as Canada, the United Kingdom and the European Union.
There remains the political explanation. This has undoubted democratic legitimacy. But, in democracy, political action serves the common good best when it is based on the legality of the international order and the shared prosperity of free trade.