DAVOS, Switzerland聽鈥 President Donald Trump鈥檚 use of tariffs as a foreign policy tool added fresh impetus in Davos this week聽to efforts to boost global trade beyond the US, with frustration palpable among many of Washington鈥檚 top trading partners.
Tariffs roared back into focus when Mr. Trump last weekend threatened new tariffs on European allies opposing his designs on Greenland, before stepping back from them on Wednesday after announcing a deal framework with NATO over the Arctic island.
鈥淚t鈥檚 the speed, scale, and scope of change that is really rattling the world,鈥 Canadian Finance Minister Fran蟹ois-Philippe Champagne said during a panel discussion on tariffs at the World Economic Forum鈥檚 annual meeting in the Swiss mountain resort.
The WEF is meeting in Davos for the first time since Mr. Trump last year hiked US tariffs to their highest level in nearly a century, sending countries scrambling to pick up the slack by trading more with each other.
Mr. Trump, who says his policies are bringing back jobs to the United States, spurring trillions of dollars in investment and firing up growth, is ever present in WEF debates over how to temper exposure to the US, which studies forecast will play a lesser role in overall global trade than it did in the past.
Canada鈥檚 Mr. Champagne said countries were diversifying their commercial relations and doing more at a regional level to make their economies more resilient to trade policy shocks.
鈥淲hen you talk to CEOs today, what do they want? Stability, predictability, and the rule of law. I would say it鈥檚 in short supply,鈥 he said, days after Canada and China struck a deal to slash tariffs on electric vehicles and canola.
Hot on its heels came the signing of a free trade agreement this month between the European Union and South American bloc Mercosur after 25 years of negotiations – the EU鈥檚 largest ever trade pact, if it overcomes remaining legal obstacles.
Diversification of supply chains and reducing over-dependence are backed by the World Trade Organization, whose director-general Ngozi Okonjo-Iweala said such moves helped spread job creation and growth to other countries.
鈥淭his helps build global resilience and we are very supportive of it,鈥 she told Reuters in Davos.
鈥楾HE WORLD HAS BECOME MORE EXPENSIVE鈥
Boston Consulting Group forecasts the US share of global goods trade could decline from 12% to 9% in the decade through 2034, giving way to more domestic US economic activity.
鈥淭rump is sawing on the branch he鈥檚 sitting on,鈥 Dirk Jandura, head of Germany鈥檚 BGA exporters鈥 association, said this week after data showed German exports to the US falling by 9% during the first 11 months of 2025.
Volker Treier, foreign trade chief of the German Chambers of Industry and Commerce, said surveys showed tariffs on raw materials like steel and aluminum were making it dearer for companies to build up US industrial capacity.
US manufacturing activity contracted for a tenth month running in December, according to a closely watched survey.
鈥淭he world has become more expensive, and structurally it will get even more expensive,鈥 Mr. Treier said.
鈥榃E HAVE TO RECONFIGURE OURSELVES VERY FAST鈥
BCG posits a patchwork of four main nodes dominating world trade: the US, China, BRICS+ minus China, and so-called plurilateralists comprising most of Europe, Canada, Mexico, Japan, Australia, and several Asia-Pacific economies.
In the BCG study, trade among plurilateralists and China鈥檚 commerce with allies in the Global South would be key drivers of global trade, with US trade advancing more slowly.
Noel Hacegaba, CEO of the Port of Long Beach, said trade flows have been evolving significantly since Mr. Trump鈥檚 first term.
In 2019, 70% of the port鈥檚 cargo was trade with China; by last year, that figure had fallen to 60%, with more coming instead from farther afield in Southeast Asia, including Vietnam, Thailand, and Malaysia, Mr. Hacegaba told Reuters.
Boudewijn Siemons, CEO of the Port of Rotterdam, Europe鈥檚 biggest, said trade flows were adjusting rapidly to the new reality, and that the continent needed to be nimble.
鈥淲e鈥檝e been relying on cheap production in China, cheap energy from Russia, and cheap defense from the United States,鈥 he said, adding: 鈥淎nd all three of these securities are falling away, so we have to reconfigure ourselves very fast.鈥 鈥 Reuters
