Are Trump’s ‘Reciprocal Tariff’ Illegal?: The Violation of the USA’s Free Trade Agreements (FTAs)
https://www.rozen-bakher.com/timeline-risks/29/05/2025/1824
Published Date: 29 May 2025 at 18:24
Risks Timeline by Dr. Ziva Rozen-Bakher
Comments on Contemporary Risks by Dr. Ziva Rozen-Bakher
Risks Timeline by Dr. Ziva Rozen-Bakher: https://www.rozen-bakher.com/timeline-risks-all
Dr. Ziva Rozen-Bakher
A Researcher in International Relations/International Business with a speciality in Risks for Foreign Direct Investment (FDI), International Trade, and Mergers and Acquisitions (M&As) in relation to Security Risks, Political Risks, Economic Risks, and Strategic Risks
29 May 2025 at 18:24. The USA Court of International Trade (CIT) ruled today that Trump’s ‘Reciprocal Tariffs’ are illegal, so now the big question is if indeed Trump’s ‘Reciprocal Tariffs’ are legal or not. The answer is YES and NO, depending on if the country has a Free Trade Agreement (FTA) with the USA and if the country is a member of the World Trade Organization (WTO) or not, as presented in the table below. A Free Trade Agreement (FTA) aims to reduce or even to eliminate the import tariffs between the countries that are parties to the Free Trade Agreement (FTA). USA has biliteral Free Trade Agreements (FTAs) with 12 countries (see the list below), as well as two multilateral Free Trade Agreements (FTAs): USMCA and CAFTA (see below), so in these cases, Trump’s ‘Reciprocal Tariffs’ violate the Free Trade Agreements (FTAs) with each country that is party to one of these FTAs, as presented in the table below. However, Trump’s ‘Reciprocal Tariffs’ also violate the USA’s commitment to the WTO in relation to the Bound Tariffs namely, the USA has Simple Average Bound Tariffs of 3.4%, so any USA’s ‘Reciprocal Tariffs’ against any WTO member above 3.4% de facto violate the commitment of the USA to the WTO in relation to the Bound Tariffs. Considering the above, if a country has no Free Trade Agreements (FTA) with USA or the country is no member of WTO, then Trump’s ‘Reciprocal Tariffs’ are legal, while if a country has a Free Trade Agreements (FTA) with the USA or the country is a member of the WTO, then Trump’s ‘Reciprocal Tariffs’ violate these FTAs. Neverthless, Trump can impose ‘Reciprocal Tariffs’ of 3.4% instead of 10% on any country that is a member of the WTO, regardless of imposing ‘Reciprocal Tariffs’ on countries that do not have FTAs with the USA or are not members of the WTO. The bad news for Trump is that there is a short list of countries where the ‘Reciprocal Tariffs’ are legal, while there is a very long list of countries where the ‘Reciprocal Tariffs’ are illegal, as presented below.
List of Countries and Colonies sorted by Violation of USA’s Free Trade Agreements (FTAs) by Trump's ‘Reciprocal Tariffs’ on 'Liberation Day'
