When US President Donald Trump imposed sweeping new tariffs on US imports in April, global markets reacted strongly. Stocks and bonds fell, and economists warned of recession, while supply chains were heavily affected. The president declared the tariffs would liberate the US from dependence on foreign goods.

On 28 May the US Court of International Trade struck down most of President Trump's 'Liberation Day' tariffs, ruling that he had exceeded his authority. A day later an appeals court temporarily reinstated the tariffs while it considers the administration's appeal.

In April, Treasury Secretary Scott Bessent persuaded President Trump to pause his most punitive tariffs on major trading partners – except China – which averted a larger financial crisis. Markets stabilised and the White House began promoting talk of ‘deals’. Early announcements of agreements with the UK and China signal that at least a ten per cent tariff on all US imports will remain. But negotiations behind the scenes appear haphazard.

‘It’s an obvious violation of the World Trade Organization’s tariff binding and transparency rules,’ says Raj Bhala, an officer of the IBA International Trade and Customs Law Committee. The president’s actions, Bhala argues, undermine key principles of global commerce – good faith, transparency and the rule of law.

Some commentators say President Trump’s protectionist approach is coercive and unlawful under both international and domestic US law – and that it’ll probably prove self-defeating. ‘What we’re really seeing is coercion that is masquerading as trade policy,’ says Frank Garcia, a professor at the Boston College Law School. ‘You create leverage by doing illegal and outrageous things that leave others off balance.’

That approach, Garcia says, is beginning to backfire. ‘We’re seeing more and more recognition that this is actually going to damage American businesses a great deal,’ he says.

Keith Rockwell, Senior Research Fellow at the Hinrich Foundation and a former World Trade Organization (WTO) spokesperson, agrees. He believes President Trump needs to find a face-saving way out and that the most effective route would have been to address US concerns through the WTO rather than escalating conflicts.

White House officials say the administration is engaging in a series of bilateral negotiations with more than a dozen countries in the hopes of securing trade concessions. And in May, President Trump and the UK Prime Minister Keir Starmer announced the framework of a trade deal.

‘Our Deal with the United Kingdom yesterday was AMAZING for both Countries,’ said President Trump on social media. ‘We’re going to make a fortune with Tariffs, only smart people understand that.’

Despite the fanfare, Trump and Starmer’s deal isn’t final and leaves in place the ten per cent tariff on UK goods that the US president imposed in April. It removes a threatened 25 per cent tariff on the UK’s cars and steel. Meanwhile, it calls for the easing of UK tariffs and quotas on American beef and ethanol exports.

US and Chinese officials met in Geneva in early May. With trade between the world’s two largest economies at a near standstill, expectations were low. President Trump had imposed a prohibitive 145 per cent on Chinese goods, prompting Beijing to retaliate with 125 per cent tariffs and a halt to exports of critical minerals used in electric vehicle production.

In Geneva, both countries stepped back from the brink, agreeing to hold tariffs at ten per cent for 90 days while talks continue. President Trump declared the talks ‘a total reset’, but the agreement doesn’t reach any of the underlying trade concerns the US has with China. Trump’s 20 per cent fentanyl-related tariff on China remains. This leaves the effective US tariff on Chinese goods at 30 per cent – still very high.

The EU, meanwhile, is preparing retaliatory tariffs on more than €95bn worth of US goods and launching proceedings against the US with the WTO. Bhala, who’s Brenneisen Distinguished Professor at the University of Kansas School of Law, says the US won’t have ‘a plausible defence’ on balance of payments or national security grounds. President Trump has imposed a 25 per cent tariff on EU cars and auto parts and proposed a 20 per cent tariff on imports totalling €380bn.

‘Deals are on the table,’ says Devin Sikes, an international trade lawyer at Akin in Houston. ‘Countries have express interest in negotiating within the next 90 days in response to the reciprocal tariffs.’

There are limits, however, to what President Trump can agree. Without an act of Congress, he lacks authority to set tariffs beyond reversing his own emergency orders. Any meaningful US concessions must be ratified by the legislature.

Meanwhile, seven lawsuits have been filed in US courts alleging that President Trump has overstepped his authority under the International Emergency Economic Powers Act (IEEPA). Plaintiffs argue that Trump imposed tariffs unilaterally without proper congressional approval. Trump’s lawyers argue Congress clearly delegated authority to impose tariffs to the president in the IEEPA, and courts can’t review the president’s constitutionally independent finding that an emergency exists.

‘The president’s authority is being challenged,’ Bhala says. ‘Congress is not doing its job, so the courts are being asked to step in. If the lawsuits are successful, it’s not clear these tariffs will stay on.’ Ultimately, these cases could land before the US Supreme Court.

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Countries at the International Maritime Organization (IMO) – the UN agency responsible for regulating maritime transport – agreed in April to a draft framework intended to reach net zero emissions by or around 2050. The organisation said its Net-zero Framework is the first in the world to combine mandatory emissions limits and greenhouse gas (GHG) emission pricing across an entire industry sector.

The draft framework – which follows decades of discussion and pressure – will introduce a price on emissions and a fuel standard for global shipping. It aims to accelerate the introduction of zero and near-zero GHG fuels, technologies and energy sources, and to support a just and equitable transition. ‘The framework represents another significant step in our collective efforts to combat climate change, to modernise shipping and demonstrates that IMO delivers on its commitments,’ said the agency’s Secretary-General, Arsenio Dominguez.

The framework applies to ships over 5,000 gross tonnage, which account for approximately 85 per cent of the sector’s CO2 emissions. It includes two components in terms of compliance. Firstly, a global fuel standard, based on emissions intensity. Secondly, what’s referred to as a ‘global economic measure’, which will apply a universal price akin to a tax on CO2 emissions in excess of the fuel standard. 

The fuel standard includes two tiers of compliance, with a base target beginning at a four per cent reduction in emissions by 2028 compared with 2008, and a direct compliance target starting at a 17 per cent decrease.

Those vessels that meet their direct compliance target can earn fungible ‘surplus units’. Those that emit more than their threshold, meanwhile, can either purchase surplus units from others or acquire remedial units from the IMO Net-zero Fund. From 2028–2030, the initial price of a remedial unit for missing the weaker target will be $380 per tonne of CO2 equivalent, while the cost for failing to reach the higher goal is $100/t. 

The Fund’s proceeds will be used to further the decarbonisation of the sector and mitigate negative impacts on vulnerable states, such as Small Island Developing States and Least Developed Countries. 

The framework will be included in a new chapter five of Annex VI within the International Convention for the Prevention of Pollution from Ships (MARPOL), which has already established mandatory energy efficiency targets for ships. 

‘As a general premise, it is definitely great, it’s historic,’ says Ursula Zavala, Climate Change Officer of the IBA Environment, Health and Safety Law Committee, who adds that, from a legal perspective, she has no negative view of the agreement. However, Zavala has some concerns about its effectiveness. ‘I’m not sure that this system […] will really lead us to a point where the environment will benefit,’ she says, as it may be cheaper to pay the penalties than to invest in the adaptations needed to decarbonise. 

‘I don’t want companies to have bigger penalties,’ as the cost will be passed on, probably to consumers, says Zavala, who’s also a counsellor at Rodrigo, Elias & Medrano in Lima. But the fact that it has taken so many years to agree this framework means that other measures will be needed in order to keep the costs down and still meet the environmental objectives, she says.

‘It’s good that there is a deal […] it’s a win for multilateralism but is not necessarily a win for the climate,’ says Felix Klann, Maritime Transport Policy Officer at Brussels-based NGO Transport & Environment (T&E). He says that a lack of safeguards jeopardises the Framework’s success. For example, Klann believes the penalties are ‘comparatively low’ against the cost of changing fuels. T&E had argued for an $800/tCO2e penalty, far higher than the $380/tCO2e the framework would begin with. 

‘Biofuels are probably the first means [by which vessels will be able to] comply for the foreseeable future, and we’ve seen, even without particular shipping targets or policies that incentivise biofuels, the price has already spiked above the penalty [level] in the past,’ Klann says. ‘We expect the price to rise again and the penalty to be insufficient.’

Klann also highlights uncertainty as to which types of biofuels will be considered for compliance, pointing to the FuelEU Maritime policy – a regulation to promote the use of renewable, low-carbon fuels and clean technologies for ships – as a model. This EU-wide legislation, which fully entered into force in 2025, excludes crop-based biofuels due to the high risk of land-use change – that is, feedstock would be grown on fields that would otherwise be utilised for food or carbon sequestration.

The IMO approach, however, currently has no exclusions on biofuels, so Klann expects they will be the first option ship operators will explore, especially as they tend to be easier to integrate into existing engines.

The draft framework was agreed by governments attending the 83rd session of the IMO’s Marine Environment Protection Committee (MEPC). The measures will be presented to an extraordinary session of the MEPC in October for formal adoption. If ultimately adopted, the measures will enter into force from 2027. 

The IMO was initially mandated to establish a framework to address the sector’s GHG emissions by the 1997 Kyoto Protocol, alongside the International Civil Aviation Organization (ICAO). While the ICAO finally agreed its sectoral system in 2016, talks at the IMO have been beset by an array of issues, including disputes about the best course of action, who bears responsibility for any fee imposed and the objectives of potential measures. 

Despite this, incremental progress has been made over the years. This includes the adoption of energy efficiency standards for ships in 2011 and a 2018 resolution on an initial strategy to reduce GHG emissions from shipping, as well as a wealth of data collection on subjects such as fuel use to better inform future policy. 

Klann is hopeful that the regime could be tightened over the years – via reviews of the system – and address some of the current shortcomings. Over a longer-term trajectory, if the IMO continues to improve the system, ‘it could reduce emissions very significantly’ by the late 2030s or 2040s, he adds. 

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