From Uruguay to Turnberry – The Return of “Aggressive Unilateralism”

The bicycle theory of trade suggests that the global trading system, much like a bicycle, must maintain steady momentum toward freer trade—any failure to move forward will condemn the multilateral system to topple over and fall due to pressures of protectionism. As the world’s leading trading nation, the U.S. was traditionally seen as the key force to ‘steer’ and ‘peddle’ this system forward. Yet, recent developments indicate that by weaponizing tariffs, the U.S. has not only abandoned the bicycle of the multilateral trading system but has actively brought it to a standstill, risking a complete collapse.

As governments worldwide struggle to respond to the Trump 2.0 administration’s barrage of tariffs, a pressing question emerges: Is the U.S.’s “aggressive unilateralism” a temporary deviation or the new norm—one that could accelerate the breakdown of the multilateral trading system? While the future remains uncertain, this post attempts to make sense of current developments in light of past events and assess what might come next.

Understanding the New Paradigm – the ‘Turnberry System’

The “Turnberry System” derives its name from Trump’s Turnberry resort in Scotland, the site of a July 2025 agreement between the United States and the European Union. Through this system, characterised by unilateral tariffs, the US aims to lay the foundation of a new global trading order that replaces WTO rules with a tactical mix of tariffs, foreign market access, and investment pacts to achieve economic and political objectives.

In a recent op-ed in The New York Times, Jamieson Greer, the United States Trade Representative, articulates the rationale behind this new trade paradigm, arguing that the post-Bretton Woods system has become unsustainable for the U.S., leading to deindustrialization and job losses. He contends that competitors, such as China, have exploited the WTO’s weaknesses through subsidies, currency manipulation, and lax standards. In contrast, he declares President Trump’s aggressive bilateral approach—the “Trump Round” launched with April 2 reciprocal tariffs—highly effective, as it has swiftly secured unprecedented market access and delivered benefits for American workers, outperforming decades of stalled multilateral negotiations.

The emerging ‘Turnberry system,’ thus, represents a stark departure from the carefully constructed rules-based trading regime based on several rounds of painstaking multilateral trade negotiations – one historically grounded in reciprocity, non-discrimination, and fair competition enforced by binding dispute resolution. This new paradigm embraces tariffs as a central instrument of economic statecraft against friends and foes alike, to narrow U.S. trade imbalances, increase general fiscal revenues, extract foreign market concessions, and compel investment flows into American industry. Notably, the system also weaponizes trade measures to advance geopolitical and strategic aims beyond purely commercial objectives.

Lessons from the Past – Revisiting the GATT Years

The U.S.’s recent “aggressive unilateralism” echoes tactics dating back to the 1970s and 80s, when economist Jagdish Bhagwati first coined the term. It describes America’s historical pattern of threatening market closures to force trading partners to either open their markets or alter practices deemed ‘unreasonable’ by U.S. standards alone.

The 1974 Trade Act institutionalised U.S. “aggressive unilateralism” through Section 301. Frustrated by GATT’s slow, politicized processes, the US Congress empowered the President to retaliate against perceived unfair trade practices unilaterally. Section 301 was designed as a congressional delegation of authority – enabling executive action when traditional mechanisms failed to protect American interests.

Section 301 saw limited use in its first decade, frustrating congressional proponents who amended it twice (1979, 1984) to impose stricter timelines and encourage proactive cases. Its application surged in the late 1980s, primarily targeting Japan’s protectionism, unfair practices, and trade imbalance. The rise of Japan as a major player in the world trading system led to an increasing perception, within the US, that it did not adhere to the rules of fair play, and Japan was increasingly seen as a “free rider” on the international trading system.

Still unsatisfied, Congress further strengthened Section 301 through the 1988 Omnibus Act, creating ‘Special 301’ and ‘Super 301’ provisions. The U.S. aggressively enforced Section 301 in the late 1980s, including $105 million in duties on Brazilian imports while sanctioning both Brazil and India under 301/Super 301 provisions, and escalating tariffs on EU agricultural exports during the hormone-treated beef conflict. As a result, an instrument principally designed for use against Japan soon found itself as a useful ‘stick’ against US allies such as the EU, South Korea, and Taiwan to gain market access.

Furthermore,  the fundamental weaknesses in the GATT dispute settlement system—which operated on a purely voluntary basis—deepened the US grievances and contributed to its shift toward unilateralism. The GATT framework – based on a positive consensus – allowed disputing parties to veto both the establishment of dispute panels and the adoption of unfavorable rulings, while the absence of binding timelines enabled endless procedural delays. This meant a litigating country could deliberately block the establishment of a panel, refuse to adopt a final panel report, or delay the proceedings, thus putting the other litigant at a disadvantage through non-compliance. The U.S. experienced some of these systemic failures directly in several high-profile trade conflicts with the European Union, particularly regarding agricultural products such as oilseed tariffs, Mediterranean citrus preferences, and pasta subsidies. As a result, the American frustration grew, ultimately encouraging recourse to unilateral trade measures outside the multilateral system.

Back to the Future – Is the ‘Turnberry System’ the New Normal?

Although the United States’ recent aggressive tariff measures echo its late-GATT-era unilateralism, the current crisis poses a more serious and enduring threat to the multilateral trading system for several key reasons.

First, the U.S.’s aggressive use of expanded Section 301 powers in the late GATT era enabled unilateral trade sanctions, generated significant backlash among members, and directly influenced ongoing Uruguay Round negotiations aimed at curbing such unilateralism. The resulting reforms – notably replacing GATT’s positive consensus rule with the WTO’s automatic dispute ruling adoption (negative consensus) rule – addressed several U.S. concerns. However, today’s trade crisis lacks comparable institutional solutions, with multilateral negotiations under the aegis of a sidelined WTO now appearing virtually incapable of resolving long-standing US grievances.

Second, while Japan, a traditional US ally, was the primary target of trade measures during the GATT era—accused of unfair practices and a growing trade surplus—the US ultimately contained Japan through Section 301 tariffs and voluntary export restraints (a type of non-tariff barrier where the exporting country agrees to limit the quantity of goods exported to the importing country). The U.S. now faces a far greater systemic threat from its principal adversary, China – one that appears undeterred by recent tariff measures. As articulated in Greer’s op-ed, the core U.S. complaint against the WTO stems from China’s ability to exploit loopholes in global trade rules, undermining American competitiveness while remaining shielded by the very system the U.S. helped create.

Third, while GATT-era unilateralism—anchored in trade-specific disputes—relied on legislatively authorized tools like Section 301 tariffs, the ‘Turnberry system’ is qualitatively different. The US Congress’s deference to the President’s uncurtailed use of tariffs indicates a significant reshaping of the state of the US through the vast expansion of executive power. The U.S. executive, bypassing Congress’s oversight, now wields tariffs as multi-purpose instruments of coercion, advancing not only economic goals but also geopolitical leverage through arbitrary enforcement. For instance, India faces threats of 25% secondary tariffs over Russian oil imports, while China—despite buying more Russian oil—escapes such penalties. Similarly, the U.S. has imposed steep 50% tariffs on Brazil, citing multiple violations, including the trial of its former President Jair Bolsonaro and its Supreme Court measures against the spread of misinformation on social media platforms.

Finally, whereas the GATT-era unilateralism prompted a largely collective response to U.S. tariff measures as part of the Uruguay Round, the emerging ‘Turnberry System’ threatens to deepen fractures in an already fragile global trade framework and hasten the formation of competing economic blocs. This new paradigm has stratified the international community into three distinct camps: traditional U.S. allies (e.g., Europe, Japan, UK) that have acquiesced to tariff demands; the defiant BRICS coalition; and a largely marginalized Global South with limited influence over the evolving trade architecture.

It is often said that “history never repeats, but rhymes”. The maxim seems to perfectly capture today’s trade landscape. America’s current unilateralism is not the first and may not be the last, given its track record. Just as GATT-era weaknesses provoked U.S. Section 301 measures, Washington points to the limitations of the WTO (now incapable of substantive law-making) and its failure to adapt as one of the justifications for again resorting to unilateral measures. The “bicycle of trade” must indeed keep moving, but unlike the 1980s—when the Uruguay Round offered a constructive outlet—today’s system lacks even the machinery to negotiate its way out of crisis.

With no viable solution to the WTO’s paralysis, the ‘Turnberry system’ risks becoming entrenched. This system normalizes an inward-looking approach here countries that enjoy economic (or even geopolitical) leverage over their trading partners could use market access as a carrot and tariffs as a stick to extract concessions, setting a dangerous template for future trade. This could force a global rebalancing of trade commitments, potentially stabilized through new legal frameworks—whether multilaterally (however improbable) or via alternative trade arrangements. For optimists who believe that the multilateral trading system will weather this tariff storm, the good news is that the ‘Turnberry System’, unlike the past Section 301 action that enjoyed Congressional support, stands on a weaker legal footing, as the April 2 tariffs initiated under the emergency powers face ongoing legal challenges in U.S. courts. This dual vulnerability—legislative and judicial—leaves room for hope that the ‘Turnberry system’ may yet falter under domestic institutional scrutiny.