Transatlantic Trade, the Trump Disruption and the World Trade Organization

This chapter traces the evolution of transatlantic trade relations within the rules-based trading system established during the post-Second World War period by the General Agreement on Tariffs and Trade (GATT), which later became the World Trade Organization (WTO). United States-led hegemonic stability supported European recovery through the Marshall Plan and later through backing for European integration, linking trade liberalization with political stability and containment of Soviet influence. As European economies revived, commercial frictions emerged, but most disputes were managed – if not always resolved – through GATT/WTO negotiations and dispute settlement. Globalization created new opportunities but also regulatory tensions that multilateral rules struggled to accommodate. Efforts to craft deeper discipline through the Transatlantic Trade and Investment Partnership (TTIP) ultimately failed amid divergent regulatory approaches. Over time, differences on core WTO principles have eroded the shared legitimacy of panel and Appellate Body rulings. The election of Donald Trump marked a rupture: his use of national security exceptions and abandonment of most-favoured nation (MFN) practices triggered a global trade conflict and challenged the WTO’s foundations. The European Union (EU) now confronts difficult choices on diversification, systemic WTO reform and future trade leadership. Keywords: transatlantic trade; European Union; populism; World Trade Organization; Donald Trump