Law is a Fiction - Why the US–Taiwan tariff deal marks the end of the “Rules-Based Order”

It is commonly assumed that law restrains power. Recent events suggest the opposite may be closer to the truth: law functions only while power finds it useful to obey.

The US–Taiwan tariff negotiation was recently concluded with a 15% tariff cap, together with a US$250 billion investment pledge in the U.S. tech and semiconductor sectors. To support this commitment, the Taiwanese government will provide credit guarantees of up to US$250 billion to facilitate further investment.

It came as a relief to Taiwan’s media. After all, compared with the 32% tariff imposed by the Trump administration and backdated to April 2025, 15% is indeed a huge improvement.

Yet few noticed that before Trump’s second term, the world — signatories representing about 97% of global trade in these specific IT products — was operating under the WTO’s ITA (Information Technology Agreement) framework. With ITA (1) effective since 1997 and ITA (2) in 2015, the tariff on key information technology products should be zero. Indeed, before Trump’s second term, TSMC chips exported from Taiwan enjoyed a zero tariff rate.

When people in Taiwan feel relieved that the tariff will be capped at 15%, they seem to forget that it was the very same administration that raised the tariff to 32% a year ago. Ironically, the legitimacy of this tariff hike is still uncertain — the U.S. Supreme Court is still reviewing the case and will not issue a ruling until January 20.

In short, the Trump administration overruled the WTO ITA, an international legal framework, while the U.S.’ unilateral tariff actions may still be overruled by its own Supreme Court judges.

This demonstrates how vulnerable and fragile laws and rules really are. It may sound shocking, but when we consider that these commonly agreed rules and laws are imagined fictions, it begins to make sense.

In 《Sapiens》, Yuval Noah Harari explains how shared imagination — what he calls intersubjective realities — underpins the evolution of human history:

“Large numbers of strangers can cooperate successfully by believing in common myths. Any large-scale human cooperation — whether a modern state, a medieval church, an ancient city, or an archaic tribe — is rooted in common myths that exist only in people’s collective imagination.”

“There are no gods in the universe, no nations, no money, no human rights, no laws, and no justice outside the common imagination of human beings.”

Unlike lying, an imagined reality is something that everyone believes in. As long as this communal belief persists, the imagined reality exerts force in the world.

Children are told by their parents and teachers to follow a set of imagined realities so that society and the country can remain stable. Laws and rules are set out accordingly. People are made to believe they will be punished if they do not follow these rules, generation after generation. This is what rulers — anyone who sits at the top of an organization and has the power to administer a group of people — use to maintain their regime. Once people believe in the imagined narratives set by rulers, they behave accordingly.

In 2026, this shared imagination is cracking.

The United States, the country that once led the creation of the world order — the United Nations, NATO, the World Trade Organization, the World Health Organization, etc. — is now the first to violate the rules it once helped establish with its allies. When asked whether there were any limits on this country’s global power, President Trump said:

“Yeah, there is one thing. My own morality. My own mind. It’s the only thing that can stop me.”

It seems the president has seen through the nature of international law. He knows it is a fiction and therefore can be broken without serious consequences. As the world’s superpower, there will be very few retaliations. Smaller countries do not dare to respond. That is why President Trump can say that his own morality is the only thing that constrains him.

What can one do when living in this world? When the old world order no longer counts and when international law has become a sheer group imagined reality?

This is not the time to weep or complain. Doing so is simply useless, as the superpower will never hear such voices. What can be done is to prepare oneself. Since the narrative has changed — from generosity and righteousness to calculation and unilateralism — people can only work harder and make themselves more useful, whether as individuals or as a country.

In a way, Taiwan handed over part of TSMC and its manufacturing ecosystem to trade for a lower tariff. This is a milestone. Yet since the tariff can be reduced, it can also be raised at any time, for any reason. The U.S. is no longer a country that honors law and promise. One needs to remind oneself that this is just a fiction and can be rewritten at any time.

For Taiwan, the implication is uncomfortable but clear.

If law can be suspended when inconvenient, then security lies not in promises, but in continued usefulness within shifting narratives of power.