Commentary by Francisco José Leandro*
For decades, free trade was built not merely upon treaties and tariff schedules, but upon something far more valuable: trust. Nations reduced barriers, opened markets, and integrated supply chains because they believed that economic interdependence would generate mutual prosperity and reduce geopolitical tensions. Yet the resurgence of protectionism in recent years has delivered a profound shock to that trust. Tariffs, once considered temporary instruments of economic defence, have increasingly become weapons capable of dismantling decades of integration and cooperation.
Perhaps the greatest casualty has been the credibility of the World Trade Organization (WTO). Established to provide a rules-based framework for international commerce, the WTO was designed to ensure that trade disputes would be resolved through institutions rather than through unilateral coercion. However, the growing reliance on tariffs by major powers has undermined both the authority and the purpose of the organisation. When states increasingly resort to unilateral measures instead of multilateral mechanisms, the message conveyed to the international community is clear: power matters more than rules. As a result, confidence in the effectiveness of the global trading regime has weakened, encouraging countries to seek bilateral or regional alternatives that can provide greater predictability and protection.
The most immediate casualty has been North American economic integration. The successor to the North American Free Trade Agreement (NAFTA), the United States-Mexico-Canada Agreement (USMCA), was intended to preserve and modernise one of the world’s most successful regional trading arrangements. However, recurrent tariff disputes and the growing willingness of governments to employ trade restrictions as instruments of political leverage have weakened confidence in the stability of the North American economic space. While trade volumes remain significant, the underlying assumption that market access is secure and insulated from political fluctuations has been profoundly challenged.
The impact has not been limited to North America. The traditional vision of a Western Hemisphere economic sphere, often associated with the legacy of the Monroe Doctrine and later aspirations for continent-wide economic integration, has suffered a similar fate. Instead of consolidating commercial relations under a United States-centred framework, many Latin American countries have sought to diversify their partnerships – The CELAC China relationship is growing. The perception that access to the North American market can become subject to abrupt political decisions has encouraged governments to cultivate stronger ties with Europe, Asia, and other emerging centres of economic power.
Beyond economic consequences, the extensive use of tariffs has also inflicted significant damage upon the international image of the United States. For much of the post-1945 era, one of America’s greatest strategic assets was not merely its military or economic strength, but its reputation as the principal architect and guarantor of an open international order. The attractiveness of the American model rested upon predictability, leadership, and commitment to rules-based cooperation. Protectionist measures have raised doubts among allies and partners regarding the reliability of that commitment. Once eroded, such reputational capital can be far more difficult to restore than trade balances or investment flows.
Ironically, tariffs may achieve precisely the opposite of their intended objective. Rather than drawing economies closer to the United States, they have accelerated efforts to create alternative networks of cooperation. The most visible example is the European Union-MERCOSUR agreement. After years of complex negotiations, both sides recognised the strategic value of reducing dependence on uncertain markets and strengthening intercontinental economic ties. What was once regarded primarily as a commercial agreement has increasingly evolved into a geopolitical partnership founded upon predictability, mutual confidence, and shared economic interests.
The same logic is shaping broader international economic relations. The European Union has intensified partnerships with Canada, Australia, and the United Kingdom, while New Zealand is increasingly integrated into this expanding network of like-minded trading economies. Together, these agreements reflect a common objective: safeguarding an open and rules-based trading order at a time when economic nationalism is resurgent.
History consistently demonstrates that prosperity flourishes where trust exists and declines where uncertainty prevails. Tariffs may generate short-term political advantages, but their long-term consequences can be profound. In today’s interconnected world, they are not merely taxes on imports. They are weapons of mass destruction directed against trust itself, and trust remains the most indispensable currency of global trade.
* Associate Professor, University of Macau (UM)
September, 2026
