The recent US Supreme Court ruling that invalidated President Donald Trump’s so-called “reciprocal tariffs” marks a significant turning point. The policy debate surrounding these tariffs has highlighted the growing tension between domestic economic priorities and the institutional foundations of the multilateral trading system that has underpinned global economic stability since the end of the Cold War. The controversy reflects sharp disagreements over the economic consequences of globalization and the appropriate role of trade policy in addressing domestic industrial challenges.
In this regard, the Court’s decision offers reassurance that the liberal international order still retains a degree of institutional resilience.
Many observers had expressed concern that if a system-leading power such as the US were able to pursue trade measures that diverge from established norms without meaningful constraint, the rules-based system could gradually experience internal strain. The ruling suggests that such an outcome is not inevitable.
While alternative tariff measures are being considered within the US policy framework, recent developments may provide an opportunity to revisit broader institutional arrangements within the liberal international order. These debates should not be viewed in isolation from the broader environment in which they emerged. They reflect accumulated domestic pressures associated with the outcomes of neoliberal globalization, including widening inequality among countries, firms and individuals, as well as a perception that the gains of globalization have not been evenly distributed across regions and social groups. Addressing these underlying concerns will be essential in maintaining public support for open markets, multilateral cooperation and sustained economic integration in the years ahead.
While existing rules-based dispute resolution mechanisms can impose reputational costs on smaller states, they often face practical limitations when addressing policy divergence by system-defining actors whose economies are deeply integrated into global financial markets, technological platforms and shared security arrangements. Traditional approaches such as collective sanctions or coordinated tariff retaliation may prove difficult to implement effectively in a global economy characterized by extensive financial interdependence, technological connectivity and shared strategic interests.
Instead, the international community may benefit from considering an approach based on conditional market access. At present, participation in the liberal international order is effectively unconditional. Even when major economies introduce policy measures that create friction with established trade norms, they continue to enjoy broad access to foreign markets, digital ecosystems, supply chain networks and financial infrastructures. This creates a structural asymmetry in which policy divergence does not necessarily translate into immediate or proportionate material economic costs for large economies with diversified domestic markets.
However, the structure of the US economy has evolved in ways that make it increasingly sensitive to restrictions beyond traditional tariff retaliation. As services, digital industries and financial activities now account for the majority of US economic output, productivity growth and export earnings, access to foreign digital markets, cross-border data governance frameworks, advanced procurement systems and integrated financial infrastructures has become strategically important. Because of this structural dependence, limitations in these domains could impose disproportionately higher economic costs than conventional tariff countermeasures, particularly in sectors such as digital services and intellectual property–driven business models.
A revised system could therefore link continued participation in multilateral economic cooperation with sustained access to key economic domains. For example, if a state were to introduce unilateral tariff measures that generate systemic tension within the rules-based trading system, participating countries could collectively review its access to government procurement markets, digital service certification regimes, cross-border data flow agreements, carbon border adjustment mechanisms, investment screening fast-track systems or joint financial infrastructure initiatives.
This approach does not seek to sanction norm-diverging states directly, but rather to recalibrate the conditions under which they participate in cooperative economic frameworks. Such measures would help ensure that continued integration remains aligned with shared institutional commitments within the rules-based trading system. Importantly, these mechanisms could be implemented through existing institutional platforms such as OECD-led digital taxation frameworks, carbon border adjustment systems, regional procurement agreements or plurilateral investment facilitation arrangements, thereby reducing the need for entirely new governance structures or treaty-based enforcement mechanisms.
Beyond deterrence, reforms should also address the distributive shortcomings associated with the neoliberal model that has shaped global economic governance over the past several decades. Under clearly defined conditions such as significant balance-of-payments stress, sudden external shocks or structural adjustment pressures, states could be permitted to introduce temporary and limited tariff measures, subject to prior notification and ex post review by a multilateral body. This would provide domestic policy flexibility while helping to prevent the slide into indiscriminate protectionism or sustained economic fragmentation.
Similarly, the rise of global digital corporations calls for updated tax governance. Entrepreneurs such as Elon Musk, Jeff Bezos, Mark Zuckerberg, Tim Cook and Jensen Huang generate substantial revenues across multiple jurisdictions, yet existing tax regimes largely focus on the country of corporate registration. Allowing taxation based on market jurisdiction rather than solely on registration would not merely enhance fiscal equity; it would also help sustain the political legitimacy of an open economic order in which technological gains are not perceived to accrue exclusively to a narrow set of actors.
In short, the liberal international order must be preserved but not in its current institutional configuration. A system grounded in free trade and multilateral cooperation should evolve to incorporate collective mechanisms that help manage policy divergence by all states, including system-leading powers. Procedural safeguards for temporary trade adjustments, improved transparency in economic policy coordination and a global taxation framework for digital enterprises should also be considered as part of a broader institutional adaptation process. Without such measures, future leaders, whether in the US or elsewhere, may find it politically rational to pursue unilateral economic measures in response to domestic pressures. In this sense, upgrading the liberal international order is less a normative preference but a strategic necessity for sustaining both economic openness and political legitimacy in an increasingly complex and interconnected global economy.
Wang Son-taek
Wang Son-taek is an adjunct professor at Sogang University. He is a former diplomatic correspondent at YTN and a former research associate at Yeosijae. The views expressed here are the writer’s own. — Ed.
khnews@heraldcorp.com
