After strong growth in 2024, world trade will take a hit this year. Many point your finger on the president Donald Trump. It’s a mistake.
The World Trade Organization said that the volume of goods trade this year will contract 0.2%. Her revised forecasts “is nearly three percentage points below what she would have been without policy changes.”
The culprit? The commercial organization blame “an increase in prices and the uncertainty of commercial policies”. Of course, it is an indirect reference to the series of Trump pricing hikes, breaks and withdrawals.
About everyone thinks that Trump is responsible for breaking the global trade system.
A banner showing a photo of President Donald Trump is presented outside the building of the American Department of Agriculture (USDA) on June 3, 2025, in Washington, DC
Images Kevin Carter / Getty
The Associated PressFor example, wrote that the American president said “a trade war on the rest of the world”. In doing so, he “panicked the global financial markets, increased the risk of recession and broke the political and economic alliances that have made a large part of the world stable for business after the Second World War”.
This story is superficial. It is much more precise to say that the commercial order based on the post-war rules is dead, but China killed it and that Trump ceased to claim that he continued to exist.
There had been a great hope at the turn of the century that China would end the long -standing predatory and criminal practices by joining the World Trade Organization. Overall, however, Beijing did not abandon these practices after membership in December 2001.
Trump, in response to Chinese intransigence, has changed the world, irrevocably. As Politico wrote, “The Trump administration has brought a lasting blow to a large part of the post-second world war consensus around free trade and long-term cooperation.” Former Secretary of State Condoleezza Rice, at Aspen Security Forum, said: “We must recognize that we are probably not going back to this system.”
In all probability, we do not return to this system at all. On the one hand, there is, at least right now, almost no domestic pressure on Trump. Its policies work.
“Remember in April, after the Liberation Day and the markets plunged and there was so much concern about what it would do to growth, at these higher reciprocal rates, what it would inflation”, ” CNBCSara Eisen said on July 16. “Guess what? First, these rates were not shot and although we have seen higher rate rates in all areas, which was not a great increase in inflation, the weakness of the economy or a collapse of the financial markets.”
“We saw $ 26.6 billion in June,” said Eisen, referring to net income from the Federal Government tariff. “Of course, someone pays prices, but it’s not the American consumer.”
However, Trump, to use one of his favorite terms, continue to “win”?
“There is no doubt that exporters abroad continue to pay many new samples,” DC’s commercial analyst Alan Tonelson told Washington, in Washington, in Washington Nowsweek This month. “Import prices of the main commercial competitors such as China, Mexico and Canada are decreasing on an annual basis. In fact, for heavy import items such as shoes, smartphones and school supplies, prices are constantly decreasing. In a striking basis, on an annual basis compared to Japanese car export vehicles to the United States.
There is bipartite support for its general policy.
“This is a big problem that you now have two presidents of two different parts take a protectionist line,” said Robert Zoellick, former representative of American and former trade World Bank President of the group, in AspenReferring to Trump and Joe Biden. “It is a very big change in the nature of trade policy.”
However, Trump must carry out policies well. Like Tonelson, who blogs on the trade at RealityNoted: “It is reasonable to assert that Trump’s pricing movements have been unnecessarily complicated and erratic and that national companies would benefit from predictability”.
However, as the commercial expert also said, “most American companies have managed to sail in turbulence”.
Foreign competitors have much fewer options. “The United States remains the largest integrated market, so no foreign leader will last a long time after having been at the service of American customers,” said Charles Ortel, an investor and financial writer based in Asia, said Nowsweek. “Meanwhile, many will rush to invest in America to get around these prices.”
Trump will also have to stimulate the manufacturing belonging to the Americans, better achieved with an extended investment tax credit.
At a time when China is quickly preparing for war – “dare to fight” Xi JinpingThe mark of these days – Trump will not have much time to rebuild American manufacturing behind its new price wall.
Time is running out for another reason: Trump’s trade measures are world trade, which means that they are also in geopolitics and change the world, as Rice suggests.
“Any student in history will know that the most dangerous phase is the interrelage between a world order and another”, the Minister of Foreign Affairs of Singapore Vivian Balakrishnan said to Aspen. “Are we in this interrelage? Yes, we are.”
Gordon G. Chang is the author of Plan red: the Chinese project to destroy America And China’s future collapse. Follow him on x @Gordongchang.
The points of view expressed in this article are the own writers.