Both India and Bangladesh face exceedingly high tariffs from the US – 27% and 37%, respectively – which led some to hope the South Asian giants would band together and strengthen their trade ties. Instead, the relationship is souring, potentially disrupting trade and shipping routes in the entire region.

On 13 April, Bangladesh stopped all land imports of yarn from India, ostensibly to protect domestic producers from foreign competition. The restriction effectively acts as an expensive tariff for Indian imports, as all yarn must now travel via sea or air routes, which is far more costly and may lead to delays as sea routes become backed up due to the excess traffic. 

After the restriction was announced, India withdrew transshipment facilities for Bangladesh on 8 April, citing “congestion”. Since 2020, Bangladesh had been transporting goods, especially clothing, to India by road and using Indian ports, stations, and airports to get them to their final destination in Europe or the US. 

This made exporting much faster for Bangladeshi producers, cutting down transit times from eight weeks to one. Bangladeshi shipment hubs are not equipped to handle the massive volumes of exports that local producers send abroad; shipping routes are made more dangerous by piracy incidents, which have been on the rise since last year. 

At the moment, the effects of the reciprocal restrictions seem to be limited: trade relations between the two countries “are still underway and form a significant part of our bilateral commerce,” said Sudhanshu Das, a regional minister in Tripura, an Indian region on the border with Bangladesh. 

The relationship between India and Bangladesh, marred by a turbulent partition in 1947, has improved significantly over the past decade, with the resolution of long-standing border disputes and the establishment of treaties and credit lines. When Bangladeshi Prime Minister Sheikh Hasina was forced to resign after months of unrest, she took refuge in India; the new Bangladeshi government demanded her extradition, which the Indian government is refusing while accusing Bangladesh of “systematically persecuting” Hindu minorities.

India and Bangladesh are important trade partners. India is Bangladesh’s second-largest source of imports, responsible for 17% of all imports; most of Bangladesh’s exports go to the US and Europe, in large part because of the country’s second-largest clothing export industry. Bangladesh is India’s biggest trading partner in the subcontinent, but the trade balance is heavily in India’s favour, with a £6.93 billion trade surplus for the Asian giant. 

The restrictions and likely disruption they will cause serve as a powerful example of the way internal politics and even relatively minor diplomatic spats can have a broad-ranging effect on global trade. This is also a sign that the weaponisation of trade is becoming normalised across the world, and that its tools have expanded beyond tariffs to affect trade routes, deep-tier supply chains, and long-standing trade agreements. 

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The WTO’s Global Trade Outlook for April 2025, published on Wednesday, 16 April, presents a grim view of international trade, one marred by reciprocal tariffs and fears of a worldwide trade war.

In its first report since Trump’s broad-ranging tariffs came into effect, the WTO revised its estimates of global trade volumes, forecasting they would fall by 0.2% in 2025 and pick up slightly in 2026, rising by 2.5%. In the October report, trade volumes were predicted to rise by 3% in 2025 after a strong 2.7% growth in 2024.

A forecasted 1.7% reduction in North American trade is largely responsible for the shift, while merchandise trade is expected to keep rising, albeit less than previous estimates, in the rest of the world. The most marked decrease is expected to be in Asian trade, now forecasted to only grow by 0.6% compared to the impressive 7.4% growth projected in the October report. 

This comes as tariffs imposed by the Trump administration come into effect all over the world; while many of the headline-making country-specific tariffs have been halted for 90 days, the 10% baseline tariff remains for all exports to the US. Nevertheless, the trade uncertainty caused by the tariff announcements and fears of further tariffs on specific industries, like pharmaceuticals or metals, is responsible for the “significant reversal” in estimates, said the WTO. 

US tariffs on China, the only ones not subject to the 90-day delay, currently stand at 145%, with a 125% reciprocal tariff levied by China on US goods. This is expected to lead to a sharp fall in US imports from China, creating opportunities for suppliers from emerging economies to fill the gap. Similarly, Chinese exports to all regions except North America are expected to rise by as much as 9% as goods are redirected outside the US.

If the currently suspended tariffs were to come into effect, they would lead to a further reduction of 0.6% in global trade, with emerging economies bearing the brunt of the effect. A rise in trade policy uncertainty, for example if more countries enacted reciprocal tariffs against the US, could lead to a further 0.8% decline, for a total of -1.5% trade growth in 2025.

The report marks the first time the WTO measures trade in services, a growing but oft-overlooked sector in global trade. Services trade is expected to grow significantly in 2025, but tariff-related uncertainty and a decrease in global trade will see it rise by just 4%, more than a percentage point below pre-tariff estimates. 

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With more details being released by the US and some countries already releasing significant retaliatory tariffs, a clearer picture is emerging – one of a global economy which will be, at least for a short while, deeply affected by the sweeping tariff regime. Changes and adjustments resulting from this are expected to have far-reaching effects on the global trade industry, diverting trade flows and transforming supply chains. 

When Asian markets opened this morning, it was clear their adjustment to Trump’s tariffs was far from over. Japan’s Nikkei lost 7.8% and China’s main index, the Shanghai composite, lost 7.3%, the biggest fall since the 2020 pandemic. Hong Kong’s Hang Sei index had the biggest one-day drop in 28 years, closing at -13.2%. On the other hand, Asian currencies may see a resurgence as investors move away from the dollar and towards “safe havens” like the Japanese yen, Swiss franc, and Euro, all of which have risen in the past few days. 

Many Asian countries have been among the hardest-hit by Trump’s tariffs, with China subject to a staggering total 54% tariff. The US is by far China’s biggest trading partner, and the recently announced 34% retaliatory tariff is expected to hit US exporters hard when it goes into effect on 10 April. 

The two most important Indian stock indexes fell by around 5% on opening, likely in response to the 26% tariffs imposed by the US. This was in part driven by Tata motors, one of the largest Indian auto companies, which fell by over 10%. Jaguar Land Rover, one of its subsidiaries, was the first major company to announce it would halt shipments of its UK-made cars to the US due to the tariffs levied on the global auto industry. 

Amid fears of a US recession – which analysts like Goldman Sachs are now forecasting with near-certainty if all the tariffs go into effect as announced – oil prices have also dropped to a 4-year low. Brent crude, the benchmail oil marker, has continued its fall started on Friday, now costing $63.49 a barrel compared to last year’s average of about $80. 

European markets, which opened just a few hours ago, are experiencing similar shockwaves. While the UK has been widely seen as avoiding the worst of the tariffs, only being subject to the baseline 10% tariff levied against all countries (even uninhabited Antarctic islands), London’s FTSE 100 lost 4.9%. The German stock exchange fell by 10% when markets opened but has now recovered to just -5.9%, while the French Cac 40 fell by 5.7%.

This is as EU members grapple with high tariffs of 20% as well as a 25% tariff on foreign cars set to go into effect soon, which is expected to affect the already struggling German auto industry. Companies with complex supply chains, like car manufacturers, could see an exponential effect of tariffs, especially if an intermediate step of the manufacturing process happens in the US. 

The agricultural industry, too, could experience significant turbulency, as some of the countries most affected by the tariffs, such as Vietnam and Taiwan, are also among the world’s biggest coffee, cocoa, and crop exporters. This could have a ripple effect both in consumer purchasing power and in global supply chains – for example, strengthening trade between the US and Brazil, another big coffee producer that has been hit less by the tariffs. 

As companies look into diverting their supply chains, smaller players might unexpectedly come at the forefront of global trade. San Marino, a small city-state on the Adriatic coast of Italy, has been eyed as a way for some EU countries to evade US tariffs, which are 20% on the EU but only 10% on San Marino. 

It’s still hard to tell just how much the tariffs will impact the global economy, and how – as seen by the volatile response of markets to the changes. Retaliatory tariffs on the one hand could exacerbate the situation and lead to an all-out global trade war, while negotiation attempts could de-escalate current tensions and lead to a much softer impact on the global economy.

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This comes in anticipation of a flurry of tariffs expected to be released by the US on 2 April. As both companies and countries scramble to plan a response to the tariffs, China may be looking for a way to increase its own resilience and take up some of the US’s declining dominance in global trade. 

The French and Chinese foreign ministers met in Beijing yesterday to discuss deepening cooperation between the two countries, with Chinese foreign minister Wang Yi vowing to “uphold multilateralism [and] oppose unilateralism” in clear opposition to Trump. The officials agreed to strengthen economic relations between France and China by encouraging Chinese investment in France and working together on a range of industries, from agriculture to artificial intelligence. 

This move is especially significant as the EU and China have been involved in a trade spat since October, when the bloc imposed high tariffs on China’s auto industry and China retaliated by taxing European brandy imports, hitting the French cognac industry hard. That the two countries are vowing to increase cooperation and find a solution to the reciprocal tariffs is a significant step, which may in part be in an effort to present a united front to upcoming US-imposed sanctions.  

On the industry side, Xi met with over 40 CEOs and executives from companies around the world including FedEx, AstraZeneca, and Standard Chartered to discuss supply chain resilience and stability. The meeting is ostensibly just a second iteration of an event held at the same time last year with US executives and occurred just a few days after the China Development Forum, China’s most important business summit. However, the backdrop of US sanctions clearly influenced the discussions, which reportedly centred around increasing resilience and cooperation. 

While some governments are scrambling to hold last-minute negotiations to decrease the impact of tariffs, many others are looking for alternative trade partners to diversify their export markets and increase resilience. At the same time, companies – especially those with complex supply chains which may experience an exponential effect from tariffs – will be searching for ways to protect their supply chains and be less reliant on US markets. 

China, which has been grappling with slowing growth and weakening domestic demand, could be hard-hit by the sanctions too – especially with its $800 billion car and EV industry facing high tariffs. China may be looking to place itself as a viable alternative to the US when it comes to restructuring supply chains, courting Western and emerging economies alike.

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The biannual report described decreased expectations of global GDP growth and rising volatility; policy uncertainty, geopolitical risk, trade barriers, and fragmentation unsurprisingly emerged as the main threats to trade in 2025 and beyond. 

Perhaps the most consequential finding of the report is a revision of past predictions of global GDP growth, which would have seen it slightly rise to 3.3% from 2024’s 3.2% and hold steady in 2026. Due to increased uncertainty and rising trade barriers, growth is instead now projected to slow to 3.1% in 2025 and 3% in the following year. 

This is driven by a significant slowing in US growth, projected to decrease by a full percentage point from its current level in 2026, and similar slowing growth in G20 countries. Developing countries will be the ones driving growth, with India, Indonesia, and Türkiye all rapidly increasing the size of their economies. Slowing growth may help decrease inflation globally, which remains above the targets set by central banks in many countries.

While uncertainty has been increasing worldwide, with consumer confidence hitting 2-year lows in much of the Americas, trade policy uncertainty has increased exponentially in recent months, the report found. This is likely related to President Trump’s tariff plans, which threaten to impose heavy duties on the US’s main trading partners in an effort to boost domestic producers and make trade fairer. 

After a series of false starts, in which tariffs against Mexico and Canada were quickly levied and just as quickly lifted, the Trump administration has promised a sweeping tariff regime to go into effect on 2 April, nicknamed “liberation day”. Mexico and Canada were most affected by the rise in uncertainty; these two countries, as well as the US and Brazil, experienced slowing growth in the past months, mainly driven by the services sector shrinking.

Increased tariffs aren’t just affecting uncertainty. The OECD predicts that tariffs were they to go ahead, will be “a drag on global activity” and “add to trade costs, raising the price of covered imported final goods for consumers and intermediate inputs for businesses”. This effect will be amplified in regions with highly international, integrated supply chains, as the North American market is, potentially multiplying the effect of tariffs and driving unprecedented supply chain transformation. 

On the flip side, the OECD report sees potential for sustained growth if tariffs were removed and technology harnessed to boost productivity. An optimistic prediction of high AI adoption with robotics integration is projected to add over 1.4% to annual labour productivity over 10 years, while a more modest prediction of high integration with adjustment frictions is still expected to add over 0.6%. The report also highlights the importance of encouraging competitiveness in domestic economies, a measure which has consistently gotten better over the past 6 years; the UK has maintained its position as the most competition-friendly of the countries surveyed. 

While the risk of tariffs and a retaliatory regime that might give way to an all-out trade war could be destructive, international cooperation could open the door to rising growth. Diversification, and strengthening supply chains will be a useful stopgap for firms affected by the tariffs and should be encouraged by national policies. However, a sustained effort to reduce fragmentation and multilaterally lower tariffs is the only thing that will bring the global economy back to sustained growth. Geopolitical risk, driven by conflicts in Europe and the Middle East and their effect on trade routes and energy prices, contributes to an undercurrent of volatility and uncertainty; developments in those conflicts or other simmering global conflicts could further contribute to rising or lowering consumer confidence and uncertainty.

The report paints a sobering but potentially optimistic picture for the months ahead. While fragmentation and tariffs are driving uncertainty and slowing growth, technology and cooperation can have a mitigating effect and contribute to higher productivity. 

The first takeaway from the report, then, is that once again, trade and tariffs dominate global economic developments; trade barriers and geopolitical risk can have destructive effects worldwide, but will also be the key to promoting growth. Unlike the global disruption brought on by the pandemic, which seemed like a sweeping, uncontrollable force, or last year’s geopolitical volatility that was hard to contain or predict, 2025’s global challenges are entirely within the international community’s control – as is fixing them. 

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Investment giant BlackRock’s plans to buy the Panama Canal, likely motivated by US President Donald Trump’s insistence on restoring the crucial trade route to US control, look set to encounter pushback from the Panamanian government. 

Panama’s President José Raúl Mulino said on Wednesday 5 March that Trump was “lying” about the US reclaiming the canal, which Mulino said “is Panamanian and will continue to be Panamanian.” On Friday, Panama announced its Maritime Authority, which is responsible for oversight of Panama’s port infrastructure, would request all legal and financial documents involved in the sale of two key ports on either end of the Canal to a group of investors backed by the US asset management firm. 

In the first months of his presidency, Trump has made aggressive foreign policy a centrepiece, with bids to increase US involvement in Gaza, buy Greenland, and a much-rebuffed plan to take over Canada. Trump has also been increasingly vocal about taking back the Panama Canal, which the US built but ceded to the Panamanian government in 1999. 

The waterway is now run by the Panama Canal Authority (AMP), an independent entity whose board is appointed by the government. In his State of the Union speech, Trump said the US was “taking back” the canal, accusing the Panamanian government of having “essentially given it, ceded it, to China”. While the canal itself is under AMP control, the key ports of Cristobal and Balboa, at either end of the waterway, are operated by Hong Kong firm CK Hutchinson under a 25-year concession. The two ports regulate access to the canal from the Atlantic and Pacific oceans, respectively, acting as crucial logistics points for goods between the US, Latin America, and the rest of the world. 

The sale, which has not been finalised yet, would see CK Hutchinson hand over an 80% stake in the two ports, as well as 41 other ports across 23 countries, to US investment giant BlackRock for £17.8 billion. Frank Sixt, co-Managing Director of CK Hutchinson, said in a statement that “the transaction is purely commercial in nature and wholly unrelated to recent political news reports concerning the Panama Ports”. However, Bloomberg reported that Larry Fink, CEO of BlackRock, pitched his plans to Trump on the phone before finalising the deal. 

The canal is one of the world’s busiest shipping routes, handling 5% of global maritime trade and 40% of all US container traffic. The waterway looks set to become even more crucial as trade routes shift: proposed sanctions to Mexico and Canada could see an increase in maritime trade to the US, increasing traffic in a canal that already sees over 14,000 ships pass through it a year. 

Government opposition, however, could slow or even halt BlackRock’s acquisition: the transaction must be approved by the government, which has been publicly critical of plans to cede control to the US.

This may in part be motivated by Trump’s stated intentions to force authorities to stop charging US companies for transit. Panama’s economy rests heavily on the canal, which accounts for almost a quarter of the country’s GDP, and 70% of ships passing through the waterway are bound for the US. 

On the other hand, a new administration under US control could drive investment to the ports, increasing efficiency and reducing delays. While less vulnerable to recent shocks than other global shipping hubs, the Panama Canal has seen disruptions due to cyclone-driven droughts and geopolitical risk, leading Maersk to temporarily reroute some of its goods to rail freight last year. A more modern and resilient canal could bode well for global trade, but disruptions caused by US-Panama tensions place a key trade route at more risk than usual.

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This International Women’s Day, Bloomberg HT spoke to Emmanuelle Ganne, Chief of Digital Trade and Frontier Technologies at the World Trade Organization, about some of the challenges women face when accessing international trade markets.

1. Women-led businesses struggle to export – Only 15-20% of exporting companies are led by women, with barriers like operating in non-export-heavy sectors and being smaller in size.
2. Access to finance is a major hurdle – Many women face challenges securing funding due to shorter credit histories and assets often being registered in a man’s name.
3.  Policy matters – Governments can drive change by integrating a ‘gender lens’ into trade regulations, ensuring policies support women-led businesses.
4. Data drives action – Better gender-disaggregated data can help policymakers and organisations develop targeted solutions.
5. Digitalisation can be a game changer – Technology provides women with better access to international markets, trade information, and alternative financing solutions.
6. AI could unlock new opportunities – AI-powered alternative data can help assess creditworthiness, making it easier for women to secure funding.
7. Connectivity remains a challenge – For women in developing economies, limited Internet access still restricts their ability to leverage digital trade tools.

This interview was recorded at our inaugural event: Women in Trade, Treasury & Payments.

The post VOXPOP | Emmanuelle Ganne on the challenges women face when accessing international trade markets appeared first on Trade Finance Global.

Listen to this podcast on Spotify, Apple Podcasts, Podbean, Podtail, ListenNotes, TuneIn

Estimated reading time: 5 minutes

AI holds the power to transform trade, offering opportunities to enhance efficiency, reduce costs, and empower smaller players in the global market. However, it also introduces complexities and ethical dilemmas. The question remains to be seen: will it bridge gaps, lower barriers, and drive innovation? Or will it create hurdles, deepen inequalities, and exacerbate existing challenges?

The promise of AI reshaping trade and services

When most people imagine AI in a business setting, they picture large tech giants or multinational firms leveraging cutting-edge AI tools to optimise processes and outpace competitors. While larger firms tend to be at the vanguard of the technology’s development, the potential benefits reach smaller businesses as well.

Ganne said, “AI can transform raw data into actionable insights, whether it’s optimising logistics, automating customs and compliance processes, or predicting supply chain disruptions.”

At the state level, countries with limited resources can expand their role in international trade by reducing inefficiencies and cutting costs. This creates opportunities for smaller economies to compete in markets traditionally dominated by larger, wealthier nations.

Ganne said, “AI can reshape countries’ comparative advantages. New competitive advantages could emerge from factors like educated labour, digital connectivity, favourable regulations, or even abundant energy.” Such factors can help them emerge as leaders in this transformative space. The potential for growth and innovation is immense as nations work toward a more connected and equitable global marketplace.

Facing the challenges that come with AI

The technology’s inherent complexity introduces risks, particularly the opacity of its decision-making processes. This “black box” phenomenon of traditional models makes understanding or predicting how AI arrives at its conclusions difficult. Such uncertainty can undermine trust and lead to unintended consequences.

Ganne said, “There is a big challenge to regulate AI and ensure that it is trustworthy, meaning that it meets expectations in terms of reliability, security, privacy, safety, and accountability.”

Ethical concerns also loom large. AI systems are prone to biases that reflect the limitations or prejudices of their training data. These biases can perpetuate stereotypes and create disparities, especially in regions already struggling with inequality. 

This is where regulatory challenges come to the fore, as existing frameworks were designed for human decision-making, not the evolving behaviours of machines. The question of intellectual property further complicates the picture. When AI generates content, who owns it? 

Ganne said, “AI systems rely on vast amounts of data to learn and improve. If that data includes copyrighted material, like books, images, and software code, was permission obtained to use it?”

Balancing innovation with oversight requires a delicate approach. Policymakers must craft regulations that encourage AI’s development while protecting against its potential misuse. Without such balance, the challenges could overshadow the opportunities.

The growing gap between those with AI and those without

While AI opens doors for some, it risks shutting them for others. 

Advanced economies, with their robust digital ecosystems, skilled workforces, and substantial investments in research and development, are able to fully exploit the potential of AI. These countries are not only developing AI but also controlling the data and technology needed to fuel it, consolidating their advantages in trade and economic growth.

Meanwhile, lower-income countries face significant barriers. Without reliable high-speed internet, advanced computing power, or adequately trained professionals, these nations struggle to integrate AI into their economies. This lack of access prevents them from benefiting from the efficiencies and opportunities AI creates, leaving them further behind in the global market.

Ganne said, “The concentration of the AI value chain, with players like NVIDIA, TSMC, or ASML controlling 80% of the market, raises significant concerns about equity and access.”

Moreover, the concentration of AI expertise and resources in a few countries exacerbates this inequality. 

Ganne added, “Only a few players control the rich datasets that actually fuel AI. Without cooperation to address these issues at a global level, the gap between AI haves and have-nots is likely to grow wider.”

This is why targeted and collaborative global efforts to democratise AI are needed.

Why the world needs to work together on AI

The world needs to work together on AI to prevent disparities and inequalities from becoming more pronounced because AI’s potential benefits are immense, but they risk being unequally distributed. 

By collaborating, nations can share knowledge, expertise, and best practices to ensure AI technologies are accessible to all. Unified global standards and regulatory frameworks would help smaller and developing countries adopt AI in ways that align with ethical guidelines, data privacy, and safety measures. 

Trade rules, while technology-neutral, already cover aspects of AI, such as eliminating tariffs on critical components or supporting cross-border services. However, the fragmented approaches taken by individual countries create inefficiencies and inconsistencies.

Ganne said, “What we urgently need is cooperation to promote regulatory convergence.”

By fostering dialogue, sharing best practices, and creating unified standards, nations can avoid the pitfalls of regulatory fragmentation. Equitable access to AI technologies depends on proactive policymaking that prioritises inclusivity and shared progress.

Ganne said, “The WTO, as a global forum for cooperation, dialogue, and exchange of good practices, can play an important role in fostering global convergence.”

By working together, countries can ensure AI serves as a tool for uniting rather than dividing the global trading system.

–

AI has the potential to redefine international trade, unlocking new opportunities and transforming the way economies interact. Yet, this transformation is not without its challenges. The hurdles, from ethical dilemmas to growing inequalities, are significant but not insurmountable.

The future of AI in trade depends on how nations and organisations approach these challenges today. Cooperation, inclusivity, and thoughtful regulation will be key to ensuring AI’s promise outweighs its risks. 

Whether AI helps or hinders international trade will ultimately be determined by the choices made now. The opportunity to shape a more connected and equitable global market is within reach, but it demands collective effort and vision.

The post PODCAST | Will AI help or hinder international trade? appeared first on Trade Finance Global.

On 18 February, the EU unveiled the “Vision for Agriculture and Food,” its ambitious new roadmap to boost the European agricultural sector, making it more resilient and internationally competitive. 

The plan was reached after 8 months of consultation with 29 stakeholders, from farmers’ unions to industry representatives and environmental groups, to determine the concerns and goals of Europeans across the agricultural supply chain. The result, unveiled last week, includes a wide range of measures to revitalize EU farming, remove restrictive red tape, and make the bloc’s agricultural exports more competitive. 

The vision has four main goals: increasing farmers’ living conditions, making the agricultural sector resilient to global shocks and competition, creating “future proof” sustainable agriculture, and connecting the sector to the needs of the EU population and its rural areas. The plan centers innovation and technology as springboards for growth, introducing AI to analyse farming data and promoting the EU as a leader in bioeconomy through a detailed strategy to be published later this year. 

Supporting agriculture from the bottom up

Biopesticides, genome editing, and biotechnologies are all touted as ways for investment to have an immediate impact, increasing production and positioning the EU as a global leader in innovative farming. Excessive bureaucracy, which has long been blamed for a stagnating agri-food sector, is being reorganised, with more funding routed to agencies like the European Food Safety Authority to speed up certification processes. The plan promises “an unprecedented simplification effort” to make it easier for businesses to comply with EU standards and facilitate entry to the industry.

The plan also includes a range of sustainability initiatives meant to encourage agri-businesses to become more environmentally friendly without adding more regulation and further decreasing their margins; instead, environmental burdens will be more equally shared throughout the supply chain and farmers will receive more optional support from the EU to decrease their environmental impact. For example, the EU will set up an “On-farm Sustainability Compass,” a one-stop shop for all environmental reporting intended to streamline reporting and make it easier for agri-businesses to measure their environmental impact and improve in key areas. 

This focus on sustainability as supporting, not constraining, farmers comes as the EU’s sustainability measures are being increasingly blamed for the EU’s stalling economic growth. On Wednesday 26 February, the EU announced a “simplification omnibus” as industrial groups from France and Germany blamed excessive environmental regulations for complicating operations and hindering competitiveness. 

The changes include rolling back carbon reporting requirements to large firms, excluding 80% of firms originally affected by them, and softening the impact of the Carbon Border Adjustment Mechanism. The Corporate Sustainability Due Diligence Directive, a proposed measure to make firms liable for ESG breaches throughout their supply chains, will also be significantly altered after US complaints. That the EU’s Agriculture vision still includes ambitious sustainability goals is a testament to the EU’s commitment to climate action; however, it could point to a more pragmatic approach that supports companies to become sustainable instead of imposing more and more regulations. 

Trade and sustainability take the stage

The last important aspect of the plan, one which may attract international attention once in effect, is the EU’s proposed measures to increase domestic competitiveness and regulate imports. The Vision outlines measures to “be more assertive in promoting and defending strategically the exports of EU products” to decrease dependence on foreign countries and increase self-sufficiency. The EU’s trading partners will be able to benefit from trade facilitation measures, like prelisting – a way to pre-approve importers so they can skip border inspections – only if the partners extend similar measures to the EU. 

The Vision also pledges to strengthen “agri-food economic diplomacy” and ban imported products containing hazardous pesticides banned domestically, as well as potentially stop imports of banned pesticides and chemicals. In another blow to importers, the plan includes “a powerful strengthening of [imports] controls on the ground” in an effort to protect domestic production and stop dangerous or unfairly produced goods from entering the EU.

A dwindling crucial industry

Amidst the international trade chaos caused by recent conflicts and President Trump’s unpredictable tariff regime, global food chains are more fragile than ever – and the EU agriculture industry is rushing to protect itself. EU farming has struggled for years amidst high regulation, low margins, and cheap crops from abroad making exports uncompetitive: in 2025, only 12% of EU farmers are younger than 40, and few newcomers are joining their ranks. 

Politically, farming has been a hot-button issue throughout the EU: a core part of the region’s cultural identity, farmers are increasingly leaving the industry and being replaced by multinational corporations or crowded out altogether. Strengthening the European food supply has been identified as one of the critical goals for regional security, and will also be crucial to bringing a stagnating EU economy back on track: the EU’s agricultural industry generated over €900 billion in 2022, accounting for 15% of the EU’s total employment. 

On a global level, too, developments in the EU food supply chain will have a ripple effect in nearly every agricultural industry. The EU is the world’s single largest agri-food exporter, with a steadily growing trade surplus that reached €70 billion in 2023; developments in EU regulations, import controls, and export restrictions are set to be massively consequential for food supply and production everywhere. 

A pivotal step for the EU’s future

This vision represents a clear commitment to tackle those issues and strengthen the industry from the bottom up. However, some are unconvinced. Environmental groups have criticised the plan for not going far enough and ignoring the negative impact of meat consumption on the climate, instead excessively supporting livestock farmers. As the debate over the EU’s Common Agricultural Policy rages on, the Vision fails to clearly set a direction for the revamped policy, which many say should target newcomers and young farmers instead of being the more-or-less blanket subsidy system it is now. 

More crucially, the plan comes at a pivotal time for the EU, when the bloc is facing an existential crisis about its own security, independence, and long-term goals. As the US is moving closer to Russia in the Ukraine conflict resolution, the EU has once again proposed that Ukraine become a member of the bloc – both in a clear effort to distance itself from Trump’s foreign policy, and as a commitment to improving the bloc’s size and strength. The EU has also been working to become more independent, both from allies like the US, by increasing defense spending and moving closer to the UK, and from foes, as seen in the widely televised ceremony earlier this month where Estonia, Latvia, and Lithuania joined the EU power grid and became independent of Russian electricity.

As German voters clearly showed last week, EU citizens want an EU that is strong, prosperous, and self-sufficient – and to get there, there is no better way than to go back to the basics of any economy: the food industry. “The Vision is our resolute response to the agri-food sector’s call for action—shaping a future that is competitive, resilient, fair and attractive for generations to come,” said Raffaele Fitto, Executive Vice-President for Cohesion and Reforms and leader of the team producing the vision. The strategies set out in the plan are ambitious, and could be crucial to turning the EU’s troubled agricultural sector around – it just remains to be seen whether the EU bureaucracy can turn these lofty ideas into action. 

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It’s been a long few weeks since Donald Trump began his second presidential term on 20 January. Trade observers braced themselves for a flurry of trade actions. The question, as always with Trump, was what would stick. 

Sure enough, Trump quickly slapped duties on imports from Colombia, Canada, and Mexico, only to withdraw them after these countries’ governments granted minor concessions. There was also a move to annual an exemption on imports under $800 – the so-called de minimis rule – that was later cancelled. (It’s certainly an issue: Since Covid, Chinese retailers like Temu have taken advantage of de minimis to ship over 1.3 billion small packages to the U.S. tariff-free.) 

At this writing, here’s what is sticking: a 10% tariff on all shipments from China, and now a 25% tariff on all steel and aluminium imports. Other taxes may follow, but that’s the first volley. Those duties are significant. The US imported $438.9 billion of goods and commodities from China in 2024, and exported $134.6 billion to the Asia nation, for a trade deficit of $295.4 billion, according to Trade Data Monitor (TDM). Theoretically, that means the US is poised to collect $43.9 billion in duties, but tariffs of course reduce imports. Chinese exporters are already hunting alternative markets, especially in Asia. 

Fortress America 

As the world’s top consumer market, the US has leverage in controlling access to its markets, and many of its outsourcing manufacturers now seek countries to replace China and other targets for tariffs on more favourable terms. The US’s top source of imports is now Mexico, followed by China and Canada; the list goes on with Germany, Japan, South Korea, Vietnam, Taiwan, Ireland, and India. 

Ireland is an interesting case: it’s the US’s top supplier of pharmaceuticals, shipping in $42.8 billion worth in the first 10 months of 2024. It’s hard to imagine Washington slapping tariffs on a product as politically sensitive as pharmaceuticals. In other words, there’ll still be pie to go around. 

Thus far, however, the focus has been on industrial goods. In 2024, the US imported $31.4 billion in iron and steel, and the three top suppliers were Canada, Brazil, and Mexico. The US imported $27.4 billion in aluminium in 2024. The top three aluminium partners in 2024 were Canada, China, and Mexico. In practice, this means the US is targeting automotive supply chains that now span both American continents. 

The likely repercussions will be on Made in America cars, as prices are forced up. The US imported $216.8 billion in motor vehicles in 2024, and the top five suppliers were Mexico, Japan, South Korea, Canada, and Germany.  

Higher costs for American cars

The higher costs the US is imposing on its automotive supply chains will help competitors, notably Germany. Although Germany’s export economy has hit some headwinds, with exports slightly down in 2024, it’s still the globe’s dominant auto exporter. In the first three quarters of 2024, German auto exports increased 18.8% to $132.7 billion. 

Meanwhile, Japan’s car exports rose 10.2% to $77.8 billion, while China’s shipments nudged up 4.8% to $67.6 billion. In the electric car sector, two countries by far dominate global trade: Germany shipped out$29.1 billion in the first nine months of 2024, down 4.7% year-on-year,  while China exported $25.4 billion, up 1.4%. That’s followed by South Korea, Mexico, Japan, and the US.

Source: Trade Data Monitor

The resilience of global trade

To be sure, the scale of global trade is such that, even if government adopts protectionist measures en masse, it’s unlikely to collapse. Total exports in 2024 are expected to be around $25 trillion. The logistics sector alone is worth over $10 trillion. Global trade isn’t going anywhere. The World Trade Organization (WTO) reports that total trade in goods should increase by 2.7% in 2025, and by a few more percentage points if the ongoing conflict in the Middle East is contained. In the first 10 months of 2024, the US, the world’s top import market, ramped up imports by 5% to $2.7 trillion.

The problem of Chinese demand

An issue that could upend geopolitics – with unintended consequences that will affect war and peace, migration, and supply chains, amongst other big issues – just as much is what appears to be a crumbling in Chinese domestic demand. In a time of geopolitical shifting and adjustments, it’s one of the key factors to watch. Luckily, many of China’s neighbours have been on a newfound path to prosperity. The dream of an open and inviting Chinese market for Western businesses might have withered, but other Asian markets are just as impressive as they are overlooked. 

They’ve also benefited from globalisation to expand their middle classes. Many of the fastest-growing import markets in the world are in Asia. Take Malaysia: in the first ten months of 2024, Malaysia increased imports by 13.2% to $248.5 billion. Or Thailand, where imports increased 6.7% to $259.6 billion. And most of their trading partners are also in Asia. That’s why the WTO expects Asian export volumes to increase by as much as 7.4% in 2024; in Europe, by contrast, exports are expected to contract by 1.4%, the WTO said. 

High-tech trade remains strong 

There is less merchandise trade than there used to be, partly because there’s more service and digital trade. But you can’t have digital or service trade unless you have silicon chips. And chips trade is now the key strategic vector. Not only is Taiwan the world’s top chip exporter, but it also China’s top supplier of electronics and electrical parts (such as chips). In the first 10 months of 2024, China imported $157.7 billion worth of electronics and parts from Taiwan, up 11.1% from the same period in 2023. The position of Taiwan as the centre of global high-tech trade complicates its relationship with Beijing. 

The rise of populist governments around the world is sure to deflate the move toward green energy products. Total imports of solar panels and related parts shrank 13.3% to $135.3 billion in the first nine months of 2024. China is the world’s number one buyer, importing $19.9 billion, followed closely by the US, Germany, the Netherlands, and India. But the upcoming election in Germany, and still new governments in the US and India, make nothing certain.

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