What Might a Trump Withdrawal from the World Trade Organization Mean for US Tariffs?

Chad P. Bown (PIIE) and Douglas A. Irwin (PIIE)

Policy Brief
18-23
November 2018

President Donald Trump has long made clear his disdain for the World Trade Organization (WTO) and has reportedly often stated his desire to pull the United States out of the organization. Given that the president withdrew the United States from the Trans-Pacific Partnership and repeatedly threatened to withdraw from the North American Free Trade Agreement, merely floating the idea that the United States would pull out of the WTO has set off alarm bells in Washington and around the world. Before Trump became president, a US withdrawal from the WTO had never been considered within the realm of possibility. It now raises several important questions. Bown and Irwin address two of them: First, what would be the consequences for US tariffs if the United States withdrew from the WTO? Second, does the president have the legal authority to pull the United States out of the organization and impose higher tariffs without congressional approval? A decision by President Trump to withdraw the United States from the WTO—if deemed legal under US law—could deal a disastrous blow to America’s foreign trade and would likely cripple an organization that has helped foster peaceful commercial relations for over seven decades.

Data Disclosure: 

The data underlying this analysis are available here.