As Tariffs Rise, the World Teams Up Without the U.S.

May 6 – As the U.S., under a second Trump term, leans further into protectionist policies and tariff barriers, much of the rest of the world is heading in the opposite direction—accelerating trade liberalization without America at the table.

Just this week, the U.K. and India finalized a long-delayed trade deal slashing tariffs on goods like whisky, autos, shoes, and jewelry. Meanwhile, the EU is expanding agreements with countries like Mexico and the South American Mercosur bloc. Canada and Asian nations are revisiting old pacts, and the CPTPP is now considering new members such as Indonesia and Costa Rica.

Although the U.S. still accounts for 26% of global GDP, its imports make up just 13% of global trade—leaving plenty of room for others to collaborate and diversify.

“The U.S. is becoming a catalyst for other nations to lower trade barriers between themselves,” said Alan Wolff, senior fellow at the Peterson Institute and former WTO deputy director.

Global Trade Moves On—With or Without the U.S.

India–U.K. trade progress highlights how nations are working around U.S. tariffs. After years of stalled talks, the deal gained urgency following Trump’s return to office and renewed tariff threats. The agreement cuts duties on over 90% of British exports to India and eases visa restrictions for Indian professionals.

Other global partnerships are gaining steam:

• ASEAN+3 (China, Japan, South Korea, etc.) ministers pledged to deepen intra-Asia trade.
• The EU recently concluded deals with Mercosur and Mexico, and is in active talks with Indonesia, Thailand, and the UAE.
• Brazil is balancing its exports between the U.S. and China.

“Countries realize they need to build resilience beyond the U.S. market,” said Achyuth Anil of the UK Trade Policy Observatory.

Is Globalization Really Ending?

Despite concerns about “deglobalization,” the trade world appears to be reconfiguring rather than retreating. WTO data shows global goods trade may shrink slightly (-0.2%) in 2024, but that hasn’t stopped major players from doubling down on new trade alliances.

“Trump’s tariff wall might look intimidating, but the real impact on global trade may be more limited than it seems,” said David Henig, a U.K.-based trade expert.

What Does It Mean for Investors?

As the U.S. adopts a more isolationist trade stance, investors may want to look abroad for growth opportunities. Emerging market partners, trade-heavy exporters, and supply chain beneficiaries could outperform if trade flows continue to bypass U.S. restrictions.

With AI-driven models like ProPicks identifying high-potential global stocks—some up over 150% YTD—staying globally diversified has never been more essential. Whether you’re focused on large caps, midcaps, or tech, strategic international exposure could be a smart hedge in today’s shifting trade landscape.