WhentheWTOFails,GlobalTradeTurnstoaLittle-KnownU.S.Court

The U.S. Court of International Trade recently thrust itself into the public spotlight. In early May, as The Wall Street Journal reported, the court struck down U.S. President Donald Trump’s sweeping 10% global tariffs, ruling that the administration overstepped its authority under the International Emergency Economic Powers Act. The administration is now expected to pivot, likely invoking Section 122 or Section 301 of the Trade Act of 1974 to keep its tariff agenda alive.

While the administration recalibrates, businesses will inevitably challenge those new maneuvers in the same venue. What is unfolding is a profound shift in the architecture of global commerce: the U.S. Court of International Trade, or CIT, is quietly stepping in to fill the void left by a paralyzed World Trade Organization.

Before its dispute-settlement mechanism broke down, the WTO was the ultimate arbiter of state-to-state trade conflicts. Its unique power lay in its teeth: an Appellate Body whose rulings were final and enforceable. It functioned like a beating heart, sustaining a stable, predictable global trade order for decades. But since 2019, disagreements over judicial appointments — driven primarily by U.S. blockades — have left the Appellate Body defunct.

As former WTO judge Jennifer Hillman aptly described it, cases are now sent to “appeal into the void.” The panel issues a ruling, but without an appellate body to finalize it, the ruling is essentially dead on arrival.

Yet, while state-to-state conflict resolution is frozen, the commercial interests of multinational enterprises remain very much alive. Without the WTO, companies are increasingly turning to the American judicial system to challenge the U.S. government’s trade measures. The CIT has become the de facto institutional substitute in this era of WTO absence.

Consider the Section 232 tariffs on steel and aluminum. In 2018, the U.S. levied heavy duties under the guise of national security. The ensuing legal battle split into two distinct tracks. On the international track, several nations sued at the WTO. By 2022, a WTO panel ruled against the U.S., but because the U.S. appealed into the void, the ruling remains unenforceable. The multilateral mechanism stalled.

On the domestic track, however, U.S. manufacturers, importers and trade associations sued in the CIT, arguing that the tariffs drove up costs, relied on opaque administrative procedures and represented an unconstitutional expansion of executive power. While foreign companies were not the primary plaintiffs, the issues raised — transparency, executive overreach and statutory limits — directly impacted their global supply chains. Because the CIT operates as a stable, functioning court, this domestic legal track continued to advance, providing a level of scrutiny that the WTO no longer could.

As Alexis de Tocqueville famously observed, in America, almost all political questions eventually become judicial ones. Today, this applies just as forcefully to international trade.

Why is the WTO failing to recover? The impasse over judicial appointments is merely a symptom. The deeper cause is a fundamental shift in the global economic structure. When the WTO was established in 1995, it operated on the assumption that member economies would gradually converge toward a market-oriented model. But over the past two decades, state capitalism has grown. Subsidies and industrial policies have been reinforced worldwide, widening the institutional differences between major economies.

Under these structural pressures, unilateralism and bilateralism have resurged. Tariffs and retaliatory sanctions have become the norm, creating a spiral of escalation that political negotiations can only temporarily pause. In this volatile environment, the judicial route offers something vital to businesses: sustainability and predictability. Courts operate on clear rules, transparent procedures and evidentiary standards. A legal pathway blazed by one company can be replicated by another.

Can the CIT permanently replace the WTO? Absolutely not.

The CIT is a unilateral court designed to review domestic administrative actions under U.S. law. It resolves disputes between private enterprises and the U.S. government. The WTO is a multilateral institution designed to adjudicate treaty obligations between sovereign states. No domestic court can replicate the WTO’s role in balancing the rights and obligations of the international community.

But the WTO cannot remain absent forever. As artificial intelligence drives a new industrial revolution and reshapes globalization, cross-border supply chains will only become more intertwined. The demand for multilateral rules will inevitably return. Until then, however, the U.S. Court of International Trade offers a practical, predictable avenue for dispute resolution. It is a necessary backstop, ensuring that even in an era of fractured globalization, the rule of law still governs the market.

Li Jingbing is a researcher of legal thought and judicial systems and a senior counsel at Beijing-based Zy Partners.

The views expressed in third-party articles are those of the authors and do not necessarily reflect the positions of Caixin.

Contact editor Lu Zhenhua (zhenhualu@caixin.com)