World Trade News

A departure from multilateral trade rules, as the US has made under Trump, could result in power exertions that make smaller countries rethink and re-forge their foreign ties. China may be among the big-power gainers.

The eventual merits of global economic integration are well established, but since it has short-term winners and losers, its governance must be reset for public resistance to be overcome. Its outcomes need to be equitable.

Talk of a Mar-a-Lago Accord to mimic the 1985 Plaza Accord is in the air. But such an effort to weaken the US currency is part of an economic world-view—articulated by White House advisor Stephen Miran—that’s too deeply flawed to work.

In India, we should view his trade aggression from a lens of economic statecraft and use the current upheaval to effect essential reforms. Where his tariff juggernaut goes would then matter less.

Mexico and Canada must hope US domestic lobbies restrain Trump’s tariffs. Big exporter China needs to up efficiency. India could use America’s ‘reciprocal tariff’ approach to its trade advantage.

Lowering import tariffs to meet Trump’s demands won’t hurt if India can lift farm production and penetrate export markets. Crucially, we must revise our policy on genetically modified (GM) crops.

China and Canada have both struck back at America’s import tariffs, while Mexico plans retaliatory barriers too. Expect this theatre of trade hostility to expand and reverberate across the world.

Strategic alignments rather than natural factors—of economic size and geographical distance—have begun shaping trade patterns. This pre-dates Trump’s second term and is far from ideal, but it’s the reality India faces.

Trade tensions will multiply even as global value chains (GVCs) are reshaped. An ability to capitalize on GVC shifts will determine whether we emerge stronger in the new global economic order.