The US has suspended its funding contributions to the World Trade Organization (WTO) for 2024 and 2025, in another Trump administration retrenchment on global trade and international cooperation.
Reuters reported that three sources have confirmed the US’ plans to withdraw future contributions, which have yet to be formally announced.
This comes at the end of a week in which fresh tariffs have sparked retaliatory plans among trading partners including Canada and the US.
Arrears
The WTO’s annual budget for 2024 totalled 205m Swiss francs, with the US required to pay 11% under a system that determines payments based on a member’s share of world trade.
Reuters obtained a document showing that the US was in arrears of 22.7m Swiss francs at the end of 2024 – a figure which totals 11% of the WTO’s budget.
This follows a pattern of disengagement begun in Trump’s first term. In 2019, the US refused to appoint new judges to the WTO’s Appellate Body and undermined the organisation’s ability to resolve disputes between members.
America first
A spokesperson for the State Department said that Trump has charged secretary of state, Marco Rubio, with reviewing all multilateral organisations of which the US is a member “to determine if they are contrary to US interests”.
This aligns with Trump’s ‘America first policy’, which has so far seen his administration substantially cut the budget for its foreign aid department, withdraw military support for Ukraine and introduce new tariffs on trading partners, especially those which run a trade surplus with the US.
Sharing his views on LinkedIn last month, Chartered Institute of Export & International Trade director general, Marco Forgione, noted that Trump’s tariffs are “just one mechanism” by which the White House is exerting geopolitical pressure to achieve wider policy goals, with an overarching aim of “unpick[ing] the multi-lateral administrative system”.
In addition to disengagement with the WTO, Trump also withdrew the US from the World Health Organization shortly after his second term began.
Canada
Trump’s isolationist policies have continued to ruffle Canadian feathers, with prime minister Mark Carney announcing tariff threats have ushered in a fundamental shift in relations.
“The old relationship we had with the US, based on deepening integration of our economies and tight security and military co-operations, is over,” he told reporters in Ottawa, following a meeting with Canada’s regional leaders.
Carney added that Trump’s actions – which have so far seen 25% tariffs levies threatened, with a confirmed 25% tariff on all car imports due to come into effect next week – has forced Canada to seek other, more “reliable” trading partners.
He also called for a “broad renegotiation” of Canada’s trade relationship with the US.
Carney, who assumed the Liberal Party leadership this month after former PM Justin Trudeau stepped down, called snap elections earlier this week and is running on a platform that includes a tough stance against US tariffs.
The issue has reignited support for the ruling Liberals, which looked set for a heavy defeat at the start of the year but now appear to be running even with the opposition Conservative Party in the polls.
EU retaliation
The EU is also preparing a response to this week’s auto tariffs in the form of a measure against US services exports, a move intended to harm US ‘Big Tech’ companies.
One EU diplomat told the FT: “The Americans think that they are the ones with escalation dominance [in the trade war], but we also have the ability to do that”.
This ability stems from the bloc’s new Anti-Coercion Instrument (ACI), introduced in 2023. It gives the EU the power to revoke intellectual property rights and deny firms revenue from software updates and streaming.
The prospect of using the ACI was raised last month, when Trump first announced his intention to impose tariffs on the EU.
The ACI was designed following Trump’s first term and is available to use in the event that a country uses tariffs in order to force policy changes.
