The state of global trade wasn’t looking very promising before the coronavirus pandemic, but as the health and economic crises ensue, trade relations are showing signs of further deterioration.
 
As the institution tasked with maintaining a rules-based trade system, the World Trade Organisation (WTO) – which is currently looking for a new leader – has been caught in the middle of ongoing disputes between the three global powers dominating trade today: the United States, China, and the European Union.
 
China and the US have consistently failed to calm trade frictions between each other since President Trump first accused Beijing of unfair trading practices and intellectual property theft, leading to the imposition of tariffs worth hundreds of billions of dollars on goods traded between the two countries. That all started in 2018, but Trump’s accusations now also include China’s alleged mishandling of the initial spread of the coronavirus and its tightening grip on Hong Kong’s autonomy.
 
On Monday night, US trade adviser Peter Navarro suggested during an interview with Fox News that a trade deal between the two countries was “over”, only to be contradicted by President Trump on Twitter shortly after: “The China trade deal is fully intact. Hopefully they will continue to live up to the terms of the agreement!”
 
While confusion looms across the Pacific Ocean, transatlantic trade tensions seem to have broadened in the last couple of weeks, too. Adding to the retaliatory duties imposed last year by the US on EU imports such as pork, single-malt whisky, biscuits, cheese, and other dairy products after a dispute on EU subsidies for Airbus, Washington is reportedly considering new tariffson $3.1bn of exports from the UK, Germany, Spain, and France.
 
Trump’s threat of retaliatory measures against European nations comes after his decision last week to pull out of talks for a new global tax framework for big tech companies, through which European governments hope to raise revenue following the collapse of public finances caused by the Covid-19 pandemic. Retaliation is therefore likely to infuriate European leaders, who have accused tech companies of profiting from the European market while making minimal contributions to their economies.
 
Amid all the chaos, Britain’s position in global trade isn’t getting any easier. Brexit negotiations are entering an especially sensitive phase, while Boris Johnson’s government is under increasing pressure to agree one of the fastest trade deals in history with Japan after Tokyo gave the UK a timetable of only six weeks to do so or face disruption.
 
Arguably, undermining the oldest and most important economic nexus we have among economies will come at a great cost. Without a fair and rules-based trade system for all, a global response to the pandemic through the creation, distribution and access to a vaccine will be an increasingly difficult mission.