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Tariffs are most certainly the word of the year

2025 was the year when the term tariffs became firmly established in the everyday vernacular of the media, lawyers, economists and analysts alike. The newold US administration under Donald Trump has consistently pursued its declared policy of revising the entire US trade policy ¹ and raising customs duties for virtually all key trading partners. These partners – China, the EU, India, Brazil – have been forced to draw up countermeasures, both symmetrical and asymmetrical. 

For example, on 2 April 2025, the US imposed an additional 34% tariff on imports from China (on top of the 20% fentanyl tariff ² and previous measures), after which China responded in kind with 34% tariffs on American goods and restricted exports of a number of rare earth metals and magnets. Trump responded by raising tariffs by another 50%, bringing the US base rate on Chinese goods to 104%. China responded with a mirror 50% increase, raising the base rate to 84%. This was followed by a mutual escalation of tariffs to 145% by the US and 125% by China. On 12 May 2025, the two sides declared a “truce” and reduced the rates: the US to 30% on Chinese goods and China to 10% on goods from the US. 

However, what is happening cannot be put down to just another round of tariff disputes. Behind the outwardly obvious measures lie more profound, systemic shifts in how tariffs are now understood and used in international economic relations and, ultimately, in international law. Tariffs are being perceived less as a technical tool for trade regulation and more often as part of broader political and regulatory frameworks. The following are three key trends that together form the modernday tariff cycle. 

Trend 1
The “securitisation” of tariffs

The matter of tariff “securitisation” has been under discussion for several years, but it was in 2025 that this process transitioned to a new, institutionally entrenched phase. During Trump’s first term, the US introduced well-known tariffs on steel and aluminium ³ , justifying them on the grounds of threats to national security. It is noteworthy that these measures were not repealed either under the Biden administration or after Trump’s return to the White House, which in itself testifies to the transformation of this exception into established practice. 

In 2025, the approach was radically expanded: the us administration effectively declared the trade deficit itself a threat to national security and deemed this represented sufficient grounds for imposing tariffs on the majority of trading partners with whom such a deficit had been recorded.⁴ 

The concept of national security was therefore taken far beyond traditional defence or strategic considerations to become a universal justification for trade restrictions. 

While the European Union has criticised the unilateral tariff measures adopted by the United States, it has actively resorted to similar logic itself. In response to American tariffs, the EU considered the possibility of introducing retaliatory tariffs⁵ , while at the same time approving its own tariffs on Russian and Belarusian agricultural goods and fertilisers.⁶ In justifying these measures, European legislators cite food security concerns, consolidating this argument directly in the relevant regulation.

This raises a fundamental legal question: does the EU Council have the authority to take such measures, or is it acting beyond its remit (ultra vires)? This question is by no means trifling, since: 
a)the European Union is bound by WTO rules regarding the maximum possible level of tariffs; 
b) the reasons given for imposing tariffs mainly relate to a hypothetical “potential threat” to EU producers, but there is a classic mechanism of antidumping/ countervailing measures for such “potential” threats. The answer to this question will probably be given by the Court of Justice of the European Union in the context of a complaint filed by Uralchem against fertiliser tariffs (Case 630/25).⁷ A similar position is expected to be taken by the U.S. Supreme Court⁸ in cases challenging the tariffs imposed by the Trump administration.

In a broader context, tariff securitisation is a logical continuation of a long-standing conflict within the World Trade Organisation over the content of the national security exception and whether a state can determine the existence of such a threat unilaterally and without procedural control.

The active promotion by the United States of the notion of “self-judging” clauses in the GATT 1947 on national security (where a state itself decides what measures are necessary to protect national security and is not obliged to prove this “on its merits” as strictly as in a regular trade dispute), combined with the crisis in the WTO dispute settlement system, has led to a shift in emphasis from legal debates to actual actions.

At the same time, a significant number of lawyers believe that such actions go beyond the scope of existing international legal obligations, which is directly confirmed in the landmark decision of the WTO Arbitral Panel in the DS512 Russia-Traffic in Transit case, in which the concept of selfjudging was rejected. 

Trend 2.
New legal inventions

Until recently, tariffs and trade policy in general were seen as a strictly regulated system of rules. WTO law set the limits of what was permissible,within which WTO members could exercise acertain degree of flexibility, without venturingbeyond the established procedures. Even in themost controversial and politically sensitive cases –such as when calculating anti-dumping margins ordetermining whether the price of gas on theRussian market is market-based for the purposes ofcalculating subsidies in EU and US cases involvingnitrogen fertilisers – the overall procedural architecture remained unchanged. Anti-dumpingmeasures could remain in force for five years withsubsequent review, while safeguard measures hada clearly limited term of effect, and theseframeworks were not questioned.

In recent years, the situation has changed fundamentally. The boundaries of what is permissible are becoming blurred, and the procedures themselves are no longer perceived as immutable. A telling example is the EU’s policy on safeguard measures pertaining to steel.

The current safeguard measure for steel (a classic measure introduced in accordance with wto rules and requirements) expires in 2026, and wto rules expressly prohibit its renewal. In response to this, the eu is not formally extending the measure, but rather it is designing a new sui generis mechanism ⁹ , avoiding classification as a safeguard measure. In so doing, at the very least, it is doing away with restrictions on its effective term, its possible review, and consideration of the interests of developing and less-developed countries. 

This is reminiscent of the Trump administration’s approach to steel and aluminium tariffs, when, by all accounts, a safeguard measure was introduced under the “label” of national security – i.e., bypassing existing rules for such measures.

This new EU instrument is not only significantly tougher than the current regime, but it is also positioned as indefinite in its effective term. At the same time, it is justified by linking it to negotiations on the overall level of tariff bindings in the WTO and is declared to be fully compliant with the Organisation’s rules. This actually amounts to a substitution of the legal classification and the creation of a new regime that merely imitates compliance with the existing legal framework. In the absence of an effective WTO dispute settlement mechanism, there is no alternative but to take such declarations of compliance with WTO requirements at face value.

Trend 3.
Complication of auxiliary criteria

Tariffs have never existed in isolation from the rules that allow one to determine to which goods they apply. In the classical understanding, this function was assigned to the rules of origin of goods: goods were identified by HS code, the country of origin was established, the existence of preferences was verified, and then the appropriate duty rate was applied.

The evolution of tariff policy has inevitably led to a significant complication of these rules. The United States set the tone by introducing requirements on tracking Chinese metal content in end products. As a result, increased tariffs began to apply even to goods such as kitchen utensils if they were found to contain metal of Chinese origin.

At the same time, the concept of the country of first smelting (melted and poured) is being actively promoted in relation to steel. As part of this approach, the decisive factor is not the place of manufacture of the final imported product, but rather the country where the primary metal was first produced. Initially applied in the US, this concept is now reflected in the new draft on protective tariffs on steel in the EU (see above). This represents a fundamental shift from the official criterion of origin to an analysis of the entire production chain.

The interaction between tariff regulation, export control regimes, sanctions and corporate reporting requirements in relation to supply chains is also becoming more complicated. In the EU, this is particularly reflected in the development of corporate responsibility and information disclosure obligations, things that are met with resistance on the part of a number of trading partners. It is worth noting that Qatar, which positions itself as an alternative supplier of liquefied natural gas to the European market, actively opposed the corresponding EU requirements.

Important:

Together, these processes are forming a new multilevel regime in which tariffs, the rules of origin, sanctions and ESG requirements are no longer autonomous elements but merge into a single system of regulatory pressure. In practice, what all the additional costs associated with the administration of foreign trade activities and regulatory compliance do is to act as an obstacle to trade. They force manufacturers either to abandon their previous production chains (which is not always effective), increase the cost of goods to comply with all the new requirements or absorb the costs in an attempt to remain competitive. 

What can we expect in 2026?

The tariff policy of the world’s leading economies will continue to change according to the principle of “controlled chaos”. The following key trends expected in 2026 can be highlighted: 

1. 1. Tariffs: continued uncertainty and risks of sudden escalation. We will continue to see threats or announcements of new tariffs being declared fairly rapidly, which might also be quickly offset if “trade deals” are reached. The fate of these deals themselves is also in question: for example, the agreement between the EU and the US¹⁰, concluded at the end of 2025, has not yet been rendered legally binding and requires validation by the European Parliament and EU member states. 

2. 2. “Paratariff measures”: Countries will continue to introduce measures that will not be called additional duties or levies, but will effectively be just that. The best example is the CBAM¹¹ mechanism in the EU, which will impose financial obligations as early as this year on importers of goods with a “dirty” carbon footprint into the European Union. Inresponse to such controversial actions, developing countries may also impose their own tariffs: India and South Africa, for example, are openly boycotting the EU’s CBAM rules. 

3. 3. Strengthening export controls: With the development of AI technologies and the rapid construction of data centres around the world, export restrictions are coming to the fore in respect of critical technologies and materials (previously, the main trade barriers existed on the import side). We can expect fragmentation in high-tech trade, given the coordination between allies and the desire of countries to ensure the stability of supply chains within a narrow circle of nations. This will inevitably lead to fragmentation in regulation based on the “us and them” principle. At the same time, the largest holders of critical mineral reserves may impose export restrictions on raw materials, as China has already demonstrated. 

4. 4. Tightening of rules of origin: 2026 is likely to see an intensification of negotiations on rules of origin and localisation in major regional structures. In particular, US trade deals that have already been concluded, plus the joint review of the trade agreement between the US, Mexico and Canada (USMCA), which will begin on 1 July 2026, will undoubtedly lead to stricter origin checks, content tests and regulatory attention to reexport/ transit. 

5. 5. Alternative trade agenda: In contrast, countries in the Global South and independent players – such as the Gulf states – will continue to promote an alternative trade agenda, which is essentially based on compliance with old rules and regulations. For example, a number of countries (the UAE, Singapore, Brunei, New Zealand and Switzerland) have announced the launch of the Future of Investment and Trade Partnership, expressing support for open markets and the free movement of capital¹².

For businesses with complex supply and production chains, this means that the need for constant monitoring, risk assessment and planning for non-obvious alternatives remains a key priority, both in strategic decision-making and in building compliance mechanisms and GR activities.

Given the trends outlined above, businesses will need to take steps in advance to adapt to the new realities, including the following:

• conduct scenario calculations of the total landed cost, taking into account new duty rates, quotas and trade-protection measures, including possible antidumping/ compensatory payments;
• strengthen documentary evidence of the origin of goods, update and formalise suppliers’ contractual obligations to provide data on origin/compliance, and introduce procedures to audit production operations to confirm substantial transformation; 
• identify and classify products in terms of the applicability of export control and reexport control regimes (including analysis of the technologies, components and software used), and develop a plan for the replacement of critical components and an alternative supply strategy (diversification of suppliers and supply routes).