While the W.T.O.’s ability to facilitate trade negotiations was largely paralyzed, its other arm, which settles trade disputes, has been much more active, reviewing dozens of cases a year.
Unlike other international organizations, whose rules have no way of being enforced, the W.T.O. may dole out punishments along with its verdicts. When one country is found to have suffered from another’s trade practices, the W.T.O. may allow the aggrieved country to recoup losses through retaliatory tariffs.
The United States has long won the majority of cases it brings to the W.T.O., though Mr. Trump incorrectly argues to the contrary. In October, the W.T.O. gave the United States permission to add tariffs on up to $7.5 billion of European products annually, after deciding that Europe had illegally subsidized its largest plane maker, Airbus.
“We never won with the W.T.O., or essentially never won,” Mr. Trump said Oct. 16 as he met with the Italian president. “And now we’re winning a lot. We’re winning a lot because they know if we’re not treated fairly, we’re leaving.”
But the United States has also lost cases, and the Trump administration is facing numerous challenges to the president’s aggressive use of tariffs to punish trading partners. Japan, Canada, China, the European Union and other governments are relying on the system to determine whether Mr. Trump’s tariffs on steel and aluminum violated global trade rules. However, many of those governments — including the European Union, Mexico and Canada — have not waited for a ruling before imposing retaliatory tariffs on American goods.
Supporters have credited the dispute settlement system with bringing the rule of law to an international trading system that formerly allowed strong countries to dominate weak ones.
But critics say the system exerts too much control, especially at the final stage when the seven-member appellate body makes a binding determination. American officials, including in the Obama administration, have accused the appellate body of judicial activism, saying it is overstepping its authority in creating new rules.