The “Trump Round” of trade talks was billed as a reassertion of American primacy. Washington hoped old rules would bend back to a familiar centre.
But markets and states are rewriting the script. The U.S. is no longer the consumer axis it once was. At the start of the century America bought a fifth of global imports. Today it buys about an eighth. That shift matters.
Short fixes, expensive mistakes
Many governments are buying time. They are propping up firms, handing out credits, and loosening rules. Brazil unveiled billions in credit support for exporters. Canada and other states have offered targeted aid too. These measures can shield businesses in the short run. But subsidies and temporary guarantees risk long-term waste and market distortion.
Some countries are reaching for blunt tools: new levies, reshoring campaigns and stricter procurement rules. India’s “Made in India” push is one example of a broader trend toward self-reliance. If many nations copy those moves, protectionism could multiply and push costs higher for consumers everywhere.
Firms hunting new customers
Instead of only pleading for mercy in Washington, companies and states are diversifying. Export funds and incentives are nudging firms to scout new markets across Asia, Africa and the Middle East. South African producers are pivoting to China. Brazil’s coffee exporters have increased shipments to North Africa and the Middle East. Yet diversification takes time. Replacing a single large market is rarely quick.
Alliances, not passivity
The bigger structural change is geopolitical: new economic alliances. Neighbours and regional partners are clasping hands. Canada and Mexico are plotting closer trade and supply-chain cooperation. BRICS and other blocs are deepening ties, expanding trade among themselves, and exploring alternatives to dollar-centred finance. These shifts aim to reduce reliance on any single market or financial system.
China stands to gain most from this rearrangement. Its trade with the global south has surged. Beijing has moved to cut tariffs and sign new deals that strengthen its reach across Africa, Latin America and South-East Asia. That trend accelerates when large western markets shrink under trade friction.
What this means for businesses and policymakers
- Short-term relief will remain tempting. Expect more credit lines and subsidies. But beware the long-term cost.
- Diversification is prudent. Firms should map alternative markets and partners now.
- Regional alliances will matter more. Supply-chain resilience will be negotiated neighbour-to-neighbour.
- Geopolitics will shape trade, not the other way round. That reality changes how companies price risk and plan investment.
Bottom line
The Trump-era strategy hopes to pull the world back toward Washington. In practice it may be pushing many countries away. Nations and firms are hedging, diversifying, and building new ties. The old order is fraying. A new one is forming — and it will not necessarily have America at its centre.
Source: The Economist
