DAVOS, Switzerland, Jan 22 – President Donald Trump’s use of tariffs in foreign policy is driving new efforts to boost global trade beyond the U.S. Many of Washington's key trading partners are feeling frustrated.
Canadian Finance Minister François-Philippe Champagne noted during a discussion panel at the World Economic Forum that “the speed, scale, and scope of change is really rattling the world.”
This year's WEF is taking place in Davos for the first time since Trump raised U.S. tariffs to their highest levels in nearly a century, prompting countries to strengthen trade among themselves.
Trump argues that his policies are creating jobs in the U.S., encouraging investments, and promoting growth. His influence is notable in discussions about how to lessen dependency on the U.S., which forecasts suggest will play a smaller role in global trade in the future.
Champagne mentioned that nations are diversifying their trade relationships and enhancing regional cooperation to make their economies more resilient to trade policy changes.
“When you talk to CEOs today, what do they want? Stability, predictability, and the rule of law. I would say it’s in short supply,” he stated, following Canada and China’s recent agreement to reduce tariffs on electric vehicles and canola.
This was quickly followed by a free trade agreement signed between the European Union and the South American bloc Mercosur, marking the EU’s largest trade pact ever, pending a few legal hurdles.
The World Trade Organization supports the diversification of supply chains, with its director-general Ngozi Okonjo-Iweala pointing out that these efforts help spread jobs and growth globally. “This helps build global resilience and we are very supportive of it,” she shared.
'THE WORLD HAS BECOME MORE EXPENSIVE'
According to Boston Consulting Group, the U.S. share of global goods trade could drop from 12% to 9% by 2034, leading to more domestic economic activity in the U.S.
Dirk Jandura, leader of Germany’s BGA exporters’ association, remarked that “Trump is sawing on the branch he’s sitting on,” following a report showing German exports to the U.S. declining by 9% over the first 11 months of 2025.
Volker Treier, head of foreign trade for the German Chambers of Industry and Commerce, pointed out that tariffs on raw materials like steel and aluminum were increasing costs for companies trying to build U.S. industrial capacity.
December marked the tenth consecutive month of contraction in U.S. manufacturing activity, according to a widely followed survey.
“The world has become more expensive, and structurally it will get even more expensive,” Treier added.
'WE HAVE TO RECONFIGURE OURSELVES VERY FAST'
BCG outlines a scenario where four key regions dominate global trade: the U.S., China, BRICS+ excluding China, and a group of countries including most of Europe, Canada, Mexico, Japan, Australia, and several Asia-Pacific economies.
The study suggests that trade among these countries and China's relationships with its Global South allies will be crucial for global trade growth, while U.S. trade will progress more slowly.
Noel Hacegaba, CEO of the Port of Long Beach, noted significant changes in trade flows since Trump took office. In 2019, 70% of the port’s cargo comprised trade with China; last year, this dropped to 60%, with more cargo coming from Southeast Asia, including Vietnam, Thailand, and Malaysia.
Boudewijn Siemons, CEO of the Port of Rotterdam, Europe’s largest port, observed that trade flows are quickly adapting to the new reality, emphasizing that Europe needs to be agile. “We’ve been depending on cheap production in China, affordable energy from Russia, and low defense costs from the U.S. And now that all three are diminishing, we must reconfigure ourselves very fast,” he stated.