The End of the WTO || Apr. 3, 2026
A cornerstone of modern globalization, the World Trade Organization (WTO), is collapsing. Following the Cold War, the post-WWII system needed a legal system to enforce trade rules, so the WTO was born.
But the WTO was slow, and its court-based dispute system couldn't enforce meaningful penalties. And its requirement for unanimous agreement made new trade deals nearly impossible. So, trade liberalization has stalled for decades.
Without the WTO, the world will revert to regional trading blocs. The issue is that this leaves several regions without balanced economies (you need production and consumption, and only a handful of areas have that). As the WTO falls apart, expect decades of economic instability and conflict.
Comments (41)
It would appear that the USA's consumption driven economic model would be a good counterparty for China's export driven model.
How is the U. S. a "dumping ground" for Stuff made in other countries ❓❓❓ DOESN'T make sense 🤔🤔🤔
Agent Krasnov, doing Krasnov work! He promised, he delivered, to Kremlin
The CPTPP was originally an Obama initiative and has been a successful international trade bloc. Despite Trump's international trade incompetence and withdrawal, it doesn't mean that the rest of the world stops trading nor that Trump's replacement necessarily will also be incompetent (the Smoot-Hawley circus only lasted 4 years after all.) Last week, the EU and CPTPP released a joint statement - it includes the intent to reform the WTO. This is a specific objective, alongside the intent to to encourage greater participation in the Multi-Party Interim Appeal Arbitration Arrangement (MPIA). Both these trade blocs have trade arbitration mechanisms that have already been used. Whatever form the new arbitration of international trade takes, the capability to replace (or 'reform') the WTO is being actively worked on. https://policy.trade.ec.europa.eu/news/joint-ministerial-statement-eu-and-cptpp-14th-wto-ministerial-conference-2026-03-27_en
Oh, and did I mention we (the US) ARE BROKE; time for others to adapt or... well you know ... as of today we are 39.07 TRILLON IN DEBT CARRYING ON YET ANOTHER F*CKING WAR! GFC2 and / or Depression 2.0 must be on the way "soon". Around 7 billion souls in GFC1 and just over 2 billion souls in Depression 1.0; so either one of these may end up in a 1789.2 planet wide. Depressing to say the least ...
39.07T so far! trump will take more debt and pass that money to his friends before he leaves
Good point, Melvin. Thanks.
I've read all your books Peter, and what's happening this decade seems in line with your (and Georges) foresight (let alone your book titles). Yet, you often seem freaked out, when exactly what you forsaw, comes to pass. Am I missing something? Your explanations of the long, historical tail of these events has given me great comfort. That dissonance makes me somewhat uneasy. Randy
It's a case of everything all at once. It's one thing if these events happened over 15 years and another over 1-2. Without the benefit of time risk skyrockets.
The development of AI is creating a new regulatory battleground the WTO is ill equipped to deal with. China has already been acting unilaterally in this regard, which is pushing the US to accelerate AI development into domains where it has the potential to do the most harm. Without the means to mediate disputes of the globalized trade that high end semiconductor manufacturing (and AI as a result) rely upon, things have the potential to escalate really quickly. This is an issue that will make or break nation states in the 21st century. I would be very nervous if I was living in Taiwan right now.
"AI" is glorified text generators. Their impact is little to none for the businesses at this moment. All the panic around them is generated to facilitate cashflow into that fad. We'll see after the LLM companies go public their true cost and real market penetration, as, so far, they run on limited investors' capital and aren't able to sustain themselves.
Good riddance.
Trump thinks the US can erect manufacturing plant like they are Legos. Being in food and beverage, the industry has been flat since his tarrifs. This must be true amongst all industries.
trump also expects the manufacturing to be erected for free as no capital has been allocated or reserved. good luck with that)))
Hey Peter, Any thoughts on CANZUK? Not very regional, but similar cultures, historic links and political alignment. Any opportunity there for trade alliance?
They're already in one - CPTPP. (Which Obama created and Trump withdrew from.)
Seems the global trade paradigm is shifting with more disruption and conflict than most would like. Trump accelerated the inevitable. Apparently. Frankly, so far, it looks like China is the "winner". The much predicted collapse just never happens.
Is the US pursuing this approach deliberately or is this just another blind decision with no eye for the long term consequences?
Come on, you know the answer to that one.
Merica GOOD - China BAD. Hey bomb that girls school. SUCKAS
A judicial system without an enforcement arm is as useful as tits on a boar hog.
You should trademark that saying and put it on T-shirts. You'd become a multi-millionaire.
i don't understand the framing of the international order as "making the US the dumping ground for [other countries] product[s]". Market principles still applied at any point in this era. if an american consumer wanted to buy an american product, the mere ability of alternatives did not proclude that. it merely allowed the american consumer the freedom to choose differently, so it was not a gift by the US to other countries, but a gift to their own consumers. in fact, the americans have "buy american" clauses themselves, like in their defense industry. so clearly, there was room to shape the system. it is not the rest of the worlds fault if the US did not do it.
Buy American for the US government is a security necessity, not an economic choice.
It will be interesting here in Europe to see how we descale. I don’t see that as a problem per se, and given we’re “not” Russia the US or China, we won’t be so bold in our adjustments or potentially require an offensive military position. The Swiss mentality may be able to expand. And Africa may warm up with relatively better deals with us than the big three. There’s certainly enough ports to avoid hostile pinch points even if it’s the long way round Africa at some point. As an aside - We haven’t discussed here Netanyahu’s articulation of a pipeline from the west to Israeli ports.
Why would anyone build a pipeline to a place that won't exist in 20 years?
Oh no! Anyway.
PZ Thank you for keeping us remarkably informed!
Hmmm.... which one is this: the 20 catastrophes predicted or the 3 that actualise? Love your work - I am here for the insight and the entertainment.
Peter, do you have any information you can share regarding the new purge in the General staff? Hegseth is canning Generals again. I've heard that the military believes Trump's advisers aren't passing along the really bad stuff that's happening. It does seem like he is micro-managing the war.
They get rid of General's, when they discover that those General's won't follow orders from Whichever Puppet that's in Office. Maybe the General's finally wake up to the REALITY of sending troops into a suicide mission and it gets to them. Most folks that have seen REAL action, it gets to them, how could it not, unless their a sociopath
What about South America and Oceania?
So when’s the new book coming out? Have a wonderful holiday all!
https://zeihan.com/acceptable-range/
China joining the WTO speeded up this whole process because it never had any respect for the WTO and ignored it's rules and rulings on international trade.
That was going to be my comment about China. Even Peter said it. No one pays attention to their rulings
This was really enlightening
Radically different mindset for organized political structures led by administrators in their 50’s, 60’s, 70’s is highly unlikely without force majeure events. Change may be inevitable but it’s not easy.
The WTO provided the loopholes for China to skirt the Bretton Woods system. The US would be nuts to preserve the system that ultimately China’s military rise. I'm deeply fascinated by what this breakdown will do to Chinesen internal cohesion. Just another log on the fire, but China has a growing list of domestic forces pulling it apart and their trade surpluses finance the system of control. Shut that down and the system of control gets starved.
Can we get some good new onve in a while peyer, you really have become a doomer. 😭
PZ, I, and I think probably the whole world has one major concern about how this will play out on a technical level. How will this affect the WTO’s most important case: McDonald’s vs McDowell’s, especially with McDonald’s looking to become the world’s number 1 supplier of Red Bull?