By Rusiripala Tennakoon –

Rusiripala Tennakoon

The recent Liberation Day announcement by Donald Trump has disrupted the domestic economies of several countries trading with the United States. What were once smooth trading operations are now facing severe consequences, causing distress and anxiety across many nations. This move signals the onset of a global conflict that may polarize international relations and usher in an era of uncertainty, ultimately impacting global economic stability.

It is somewhat consoling that, before the affected trading partners could issue formal responses, several members of the U.S. Congress themselves voiced concerns, effectively opposing Trump’s decision.

For decades, global trade was conducted fairly smoothly under the framework of the General Agreement on Tariffs and Trade (GATT), a binding agreement established in 1947. GATT aimed to promote international trade by reducing tariffs and other trade barriers and eliminating preferences on a reciprocal and mutually beneficial basis. This consensual approach laid the foundation for the establishment of a more structured organization—the World Trade Organization (WTO)—in 1995, which assumed the responsibility of overseeing global trade under accepted international rules and norms.

Trump’s latest move to revise U.S. tariffs represents a complete reversal of these widely accepted and friendly trade practices. It marks the return of arbitrary protectionism and risks igniting conflict between trading nations. This approach recalls the chaotic trading environment of the 1930s, which, through a series of economic and political missteps, eventually culminated in the Second World War.

History records many episodes of trading patterns across the world that were more genocidal in nature than genuine commercial operations. Between the fourteenth and sixteenth centuries, European sailors established dominance in the Indian Ocean. This was largely because Asian countries were the primary producers of spices, which were in high demand in the West. Rather than entering into fair agreements with the absolutist rulers of the time, these European powers often resorted to plundering where diplomacy failed.

The competition among these plunderers was so intense that it led to violent conflicts among them, as each sought to monopolize the region. The Portuguese, followed by the Dutch, were at the forefront of this aggressive expansion until they were eventually overtaken by the British. The Dutch captured the entire spice trade in 1602 with the establishment of the Dutch East India Company. This era was marked by ruthless exploitation of the natural resources and agricultural produce of underdeveloped nations by foreign invaders.

The world eventually grew weary of such inhumane practices and began to seek more liberal, fair approaches to international trade—less influenced by arbitrary power. The tragic legacy of these exploitative patterns laid the groundwork for the birth of international trade organizations like GATT. It is deeply regrettable that, in today’s developed world, we see a resurgence—not of physical genocide—but of monopolistic, protectionist policies that echo the same spirit of domination and disregard for equity.

It is a historical irony that the United States, which once championed the reconstruction of world trade and helped to establish a multinational trade system based on mutual consultation, is now taking steps to dismantle that very system. Over the years, GATT and WTO members have collectively agreed on reforms to improve the trade system. However, Trump’s current action amounts to a complete abandonment of this collaborative framework. The worst consequences will likely be borne by smaller and developing nations.

The fallout from this sudden and unprecedented move will likely push countries to act in self-interest, disregarding long-established norms. The global economic order may face slower growth and the looming threat of a full-scale trade war. Investment and production will be negatively affected, and countries may increasingly act unilaterally, to the detriment of the global community—particularly smaller countries that previously relied on WTO/GATT protections.

We cannot expect the situation to correct itself automatically. Member nations must unite and take meaningful steps to safeguard their rights and uphold a peaceful, rules-based international trading system. Since the original champions of multilateralism appear to have turned away from consensus, it is now up to the remaining WTO members to urgently call for a global dialogue under WTO auspices. It must be remembered that the WTO brought much-needed stability and fairness to international trade.

We also recall the historic initiative taken by Sri Lanka in the 1970s through the establishment of the Non-Aligned Movement. With the participation of around 80 independent and sovereign nations, it became a powerful alliance resisting the interventionist tendencies of global superpowers that often compromised the sovereignty of smaller states. By standing together, those nations avoided marginalization and asserted their place in the international order.

Today, many countries most affected by Trump’s actions can find strength in unity. A collective response is essential to effectively address this challenge and preserve a fair global economic system.