“The benefits of a tariff are visible. Union workers can see they are ‘protected’. The harm which a tariff does is invisible. It’s spread widely. There are people that don’t have jobs because of tariffs but we don’t know who these people are.” – Milton Friedman
The resuscitation of economic nationalism in the 21st century, as witnessed most visibly through the trade policies of President Donald Trump, has once again brought to the fore the perennial tension between global interdependence and sovereign self-interest. The Trump administration’s imposition of tariffs represents more than a mere trade policy; it signals a fundamental shift in how economic power is wielded in a globalized yet increasingly fragmented world. The retaliatory measures, strategic calculus, and systemic disruptions underscore the fragile balance between national interest and global stability. In this context, a recent intellectually provocative paper titled “A User’s Guide to Restructuring the Global Trading System” by Stephen Miran – an American economist currently serving as the Chair of the Council of Economic Advisers – outlines a strategic rationale behind Trump-era global tariffs, and offers a fertile ground for economic and legal analysis.
Drawing on an integrative examination of law, policy, and commercial aviation within the architecture of public international law and global economic systems, the following discussion seeks to unravel the implications of Miran’s paper not only in abstraction but also in practical application to one of the most globalized sectors in the world: air transport.
Strategic Intent: A Three-Stage Paradigm?
A deeper reading of President Trump’s tariff regime suggests a possible three-stage strategy, potentially echoing a game-theoretic approach to trade negotiations. The first stage—the imposition of high tariffs—serves as an aggressive opening gambit designed to unsettle and provoke. The second stage is calculated to coerce bilateral negotiations under duress, leveraging the economic pain induced by tariffs to extract concessions. The final stage, if one exists, would ideally involve a recalibrated trade regime with enhanced protections for U.S. intellectual property, re-industrialization of the United States and reduced trade deficits.
One would find this progression intriguing yet problematic. The central tension lies in the erosion of multilateralism and the World Trade Organization (WTO) centered trade regime in favor of ad hoc bilateralism—a shift that may offer short-term gains but risks long-term systemic instability.
Furthermore, the strategy’s effectiveness depends on the assumption that trade partners will yield under economic pressure. However, global actors like China have demonstrated resilience and strategic patience, employing counter-tariffs, diversifying markets, and reinforcing regional trade pacts like the Regional Comprehensive Economic Partnership (RCEP).
The Regional Comprehensive Economic Partnership (RCEP) stands as a singular achievement in contemporary trade diplomacy across the Asia-Pacific. Encompassing nations such as Australia, China, Japan, Korea, New Zealand, and the ASEAN Member States, the agreement reflects an unprecedented consolidation of economic intent.
Far from being a mere extension of ASEAN’s bilateral engagements, RCEP elevates regional cooperation to a new threshold. It integrates existing Free Trade Agreements into a single, comprehensive framework marked by modernity, mutuality, and structure. Strategically, RCEP may be viewed as emblematic of a larger geopolitical recalibration. With China playing a central role in its architecture, the partnership signifies a move toward regional self-determination—particularly in contrast to the retreat of the United States from multilateral trade leadership.
The emergence of this bloc, now the largest in the world by GDP and population, signals not only economic ambition but also normative contestation. It redefines the locus of influence in the Indo-Pacific, raising salient questions about the future of trade governance in an increasingly multipolar world.
Miran posits that Trump’s tariffs, far from being reactive or capricious, forms the cornerstone of a larger strategic repositioning of the United States within the global trade order. At the core of this thesis lies the proposition that global trade relations are being reconfigured into a tripartite categorization: nations amenable to U.S. influence (vassals), countries maintaining transactional neutrality (yellow), and adversarial states (red). Such a framework is not merely descriptive but prescriptive, dictating the future orientation of U.S. trade policy. What emerges is a kind of economic geopolitics, wherein trade becomes both the medium and the message of strategic alignment. The tariffs, in this scheme, serve not only as economic deterrents but also as geopolitical signifiers, compelling nations to self-select into categories based on their willingness to conform to American trade expectations.
US Commerce Secretary Scott Bessent’s recent public endorsement of this view underscores the institutionalization of this philosophy. His articulation of the tripartite classification into green, yellow, and red trade buckets reveals a blunt yet effective simplification of global trade dynamics. In essence, it reorients the trade world from a rules-based multilateral order, embodied by the World Trade Organization (WTO), into a transactional, interest-based network with the United States at its axis. The WTO, for all intents and purposes, is being recontextualized from an arbiter of fairness to a bystander in a world dominated by bilateral pressure and economic leverage.
The analytical prism through which one would view this transition would center on the conflict between the sovereignty of states and the requirements of global governance. While each state has the right under international law to enact measures it deems necessary for its economic security, such measures must be balanced against the stability and predictability that the international trading system demands. The Miran doctrine, if it may be termed as such, represents a profound deviation from the foundational tenets of international economic law. It implies a return to 19th-century-style spheres of influence, albeit articulated through trade rather than territory.
The Effects of Global Tariffs on Aviation
When applied to the aviation sector, the implications are nothing short of seismic. Aviation thrives on multilateralism, cross-border harmonization, and regulatory predictability. If the world is indeed moving towards a tripartite classification, then aviation, as a conduit of global integration, becomes both a target and a casualty. Aircraft manufacturing, international routes, passenger rights, and air cargo logistics are all predicated on a predictable rules-based system. The threat posed by a green-yellow-red model is that these systems will become fragmented, contingent upon bilateral or regional political alignments.
Airlines operating in green bucket nations may find themselves the beneficiaries of preferential treatment, such as expedited certifications, low import duties on aircraft and parts, and favorable bilateral air service agreements. Those in the yellow zone may have to contend with erratic policy signals and conditional access to U.S. markets. Meanwhile, carriers from red-labeled countries may face operational and regulatory obstructions that compromise their viability. Export controls on aviation technology, denial of overflight rights, and revocation of open skies agreements become very real possibilities in such a fractured environment.
The risk is not merely operational but systemic. The aviation sector, more than any other, relies on the cohesion of the global commons. The ICAO-driven standards and recommended practices (SARPs), the Bilateral Air Safety Agreements (BASAs), and the Cape Town Convention on international interests in aircraft equipment are all undergirded by the assumption of international good faith and cooperation. A trade doctrine that sorts states into value-laden categories inherently undermines these assumptions, replacing cooperation with conditionality.
Overall, the implications for global air transport are multifaceted and profound. At the operational level, tariffs on aluminum and steel inflate the cost of aircraft manufacturing. Boeing and Airbus, already engaged in a high-stakes duopoly, find their production costs rising, thereby affecting pricing, delivery schedules, and ultimately, airline procurement strategies.
Airlines, particularly in developing markets, may defer fleet expansion due to increased costs, affecting long-term connectivity and regional economic development. Furthermore, retaliatory tariffs on aircraft and parts disrupt supply chains, especially in maintenance, repair, and overhaul (MRO) operations. For instance, Chinese tariffs on U.S. aircraft components directly impair American MRO providers operating in Asia.
From a policy perspective, one could envision a potential breach of the Chicago Convention’s non-discrimination principle, as tariffs may indirectly privilege domestic carriers or manufacturers over international counterparts. This is exacerbated by the extraterritorial reach of national policies—a phenomenon increasingly scrutinized in international aviation law.
Moreover, air cargo, the lifeline of e-commerce and just-in-time manufacturing, would suffer disproportionately. Tariffs distort shipping routes, reduce cargo volumes, and inflate costs. The Air Transport Action Group (ATAG) and International Air Transport Association (IATA) have voiced concerns over declining freight traffic, attributing part of the downturn to rising protectionism.
In strategic terms, prolonged tariff wars erode confidence in open skies agreements and multilateral aviation liberalization. As states turn inward, bilateralism replaces global norms, leading to fragmented regulatory landscapes and diminished cooperation.
My Take
Stephen Miran’s paper and Scott Bessent’s endorsement thereof do not merely outline a trade policy; they portend a reordering of the global economic system, with profound implications for air transport. The tripartite trade world of green, yellow, and red is antithetical to the principles that have hitherto governed aviation. If the sector is to survive and thrive, it must not only adapt but also advocate—for rules, for fairness, and for the preservation of an open, predictable, and just international order. The sanctity of civil aviation is not just a matter of technical compliance but of principled governance. The skies are global; so too must be the principles that govern them.
As already alluded to, in the realm of air transport, the ripple effects are tangible and troubling—from costlier aircraft and disrupted supply chains to weakened multilateral frameworks and declining air cargo. The sanctity of international civil aviation depends not only on technical safety and operational efficiency but also on the robustness of legal and economic governance. If tariffs become instruments of coercion rather than protection, the skies may grow darker—not from clouds, but from the consequences of disjointed global policy.
To adapt to such a world, aviation actors—governments, carriers, manufacturers, and regulatory bodies—must engage in strategic foresight. First, airlines must diversify their exposure by expanding networks into markets less susceptible to sudden trade reclassification. Secondly, they should explore regional partnerships and alliances that insulate them from bilateral frictions with the United States. Regulatory harmonization with non-U.S. aviation authorities, such as the European Union Aviation Safety Agency (EASA), becomes a counterbalancing necessity.
Aircraft manufacturers, particularly those whose supply chains are globally distributed, will need to rethink their logistical assumptions. They may find themselves needing to create duplicate supply chains—a form of regulatory bifurcation—to cater separately to green and red market spheres. Such an approach is economically inefficient but may become strategically indispensable.
From a legal perspective, aviation lawyers and policymakers must begin to reassess the robustness of existing treaties and conventions in the face of unilateral economic coercion. There is a need to consider whether instruments such as the Chicago Convention offer sufficient protection against politically motivated trade disruptions. Additionally, the potential for investor-state disputes under bilateral investment treaties (BITs) could be explored if tariff impositions or retaliatory actions result in expropriatory outcomes.
On a more philosophical level, aviation stakeholders must confront the normative implications of aligning with a global trade system that is increasingly transactional. Does participation in a green-bucketed, U.S.-centric trade world compromise the neutrality and independence that international aviation law aspires to uphold? To what extent should the aviation community conform to or resist the emerging economic order? These are questions that demand not only legal acumen but ethical introspection.
