The Trump administration's trade policy throughout 2025 resembled a medieval diptych—two contrasting panels that together told a complex story about America's approach to global commerce. The left panel, which captured most attention, displayed chaotic, unprecedented tariff threats deployed with unpredictable timing and often justified by issues far removed from trade. This aggressive stance shattered existing agreements and violated WTO principles. The right panel portrayed a measured pursuit of legitimate reforms—objectives many international partners shared and that addressed real weaknesses in the global trading system.
This split-screen dynamic defined American trade relations for most of 2025. The sensational tariff announcements consistently overshadowed substantive policy work. Yet as 2026 begins, mounting evidence suggests the tariff shock strategy is losing effectiveness, potentially clearing space for constructive reforms.
The left panel's approach featured unprecedented tariff levels and justifications straying far from traditional trade concerns. Tariffs became tools for geopolitical disputes, immigration issues, or other non-trade matters. This created permanent uncertainty that disrupted business planning worldwide. However, this confrontational posture shows clear signs of exhaustion. The tariff landscape has stabilized, and the administration has undermined its own leverage by granting expanding exemptions, transforming a simple tool into a complex web of exceptions that reduces economic impact and negotiating credibility.
Market forces have also constrained the administration. The predicted negative consequences—inflationary pressure, manufacturing cost increases, and financial market volatility—have created domestic political pushback. The stock market's sensitivity to trade war escalations has given the White House reason to pause before issuing new threats.
The Greenland dispute episode perfectly illustrates this dynamic. When the administration briefly threatened 10 percent tariffs on European nations over Greenland's sovereignty, the move was widely seen as absurd. The rapid withdrawal without concessions revealed the limits of tariff coercion. It was a bluff everyone recognized, including the administration itself.
In contrast, the right panel contains policies that could strengthen the international trading system. The administration's December WTO communication outlined a reform agenda addressing legitimate concerns. The proposal to allow plurilateral agreements would prevent single members from blocking progress where most want to move forward. This could unlock advancement on digital trade, services liberalization, and environmental goods.
Other objectives include demanding greater transparency in subsidy reporting, strengthening rules against forced technology transfer, and re-examining developing country status. These technical issues require sustained diplomatic engagement, not headline-grabbing threats. They represent essential work modernizing global trade rules for the 21st century.
Recent bilateral agreements with India, Guatemala, and El Salvador demonstrate the administration's capacity for conventional negotiation. These deals included actual tariff reductions and addressed specific market access barriers through diplomacy rather than coercion. They show that when the administration chooses engagement, it can achieve mutual benefits.
The critical question for 2026 is whether this approach can scale to the multilateral level. WTO reform requires building broad coalitions and credibility—qualities that tariff shocks undermined. Trading partners need sustained commitment rather than tactical shifts. For American businesses, moving toward the right panel would bring welcome relief. While many support addressing unfair practices, constant uncertainty has paralyzed investment decisions. A predictable environment, even with higher baseline tariffs, would enable strategic planning.
The international community's response will shape US trade policy's trajectory. Many countries share concerns about China's economic model and WTO shortcomings but feared becoming tariff targets. A collaborative US posture could unlock support for reforms and create coalitions to update global rules.
The diptych metaphor captures the administration's internal tension between competing impulses: disrupting versus building. In 2025, disruption dominated. In 2026, construction has an opportunity, particularly if political calculations favor stability.
This transition isn't guaranteed. The administration maintains high baseline tariffs as leverage, and some officials view 2025's chaos as necessary to break old patterns. They may be reluctant to abandon what they see as a winning strategy.
Nevertheless, conditions favoring a shift are strengthening. The marginal utility of new threats appears to be declining as partners develop countermeasures. Domestic constituencies harmed by tariffs have become more organized. The administration's own actions—negotiating tariff reductions and withdrawing empty threats—suggest a learning process.
The ultimate test is whether reforms deliver tangible benefits justifying the turbulent path. If plurilateral agreements emerge, WTO dispute settlement improves, and Chinese practices change, the 2025 tariff shocks may be viewed as a crude but effective opening gambit. If not, they'll be remembered as destructive theatrics that damaged the global economy without results.
Observers should watch for signals that the right panel is gaining prominence: fewer new threats, detailed reform proposals shared with allies, increased engagement with traditional partners, and willingness to compromise multilaterally. The Greenland retreat and recent bilateral deals are such signals. A pattern is emerging, though it remains fragile.
The diptych of American trade policy in 2025 told a story of contradiction and chaos. As 2026 unfolds, the question is whether the narrative can shift from breaking systems to building them, from shock therapy to systematic reform. The opportunity exists, but seizing it requires discipline, strategic patience, and recognition that lasting international change comes from building durable consensus—not breaking things until opponents yield.