Filenews 8 November 2025
The global economy is experiencing a gradual rearrangement of trade flows as countries and companies seek alternative markets to avoid the highest U.S. tariffs since the 1930s. Canada and Mexico, for example, have changed the flow of car imports, with the North American country now importing more vehicles from Mexico than from the US.
At the same time, China is rejecting American soybeans and turning to South American producers, while India and China are resuming direct flights and trading rare earths with each other, closing a cycle of long-standing cold relations. This redistribution of markets marks a transitional period that affects both large economies and small states that depend on raw material exports.
"There are clear efforts to forge new alliances, strengthen existing ones and promote new relationships," says Cecilia Malmström, the European Union's former trade commissioner and now a fellow at the Peterson Institute for International Economics. These changes are emerging at every level of the supply chain: transportation and cargo handling companies are seeing opportunities in new trade flows as Chinese manufacturers look for alternative markets outside the US. "There is potential for very positive results for us," said Christian Gonzalez, vice president of International Container Terminal Services in the Philippines, adding that "global trade will continue to flow."
The first indications appear in the data: based on Chinese export data for August, shipments of goods to the US are down by 33%. In contrast, exports to the 10-member Asia-Pacific ASEAN group of countries increased by 23%, to the EU by 10% and to Africa by 26%. Clarksons' estimates of container throughput show a 3% decrease in the transatlantic corridor, while all other routes are experiencing growth. At the same time, the increased interest in alternative markets has led to investments in ports, logistic hubs and supply infrastructure, strengthening the interconnection of regions that until now have not actively participated in international trade.
Adaptation
In Europe, European Commission President Ursula von der Leyen points out that the EU is focusing on expanding its 76 transnational trade partnerships, speeding up old negotiations. On the agenda are the ratification of an agreement with Mercosur, the signing of a Free Trade Agreement with Indonesia and the resumption of negotiations for an EU-Australia agreement. This strategy shows that the EU seeks not only to protect its exports, but also to gain access to raw materials and strategic goods, reducing dependence on the US market.
At the same time, small economies are adapting. Peru is looking for buyers for its blueberries in Asia, while Lesotho, a textile producer, is turning to Asia, Europe and Africa. A core of 14 countries, including New Zealand, Singapore, Switzerland and the United Arab Emirates, have formed a new partnership to boost trade and investment. The strategy of smaller economies demonstrates the need for flexibility and speed in formulating trading strategies, especially in times of uncertainty.
The International Monetary Fund notes that the shift towards protectionism on the part of the US boosted flows just before the tariffs were implemented, prompting the World Trade Organization to revise its forecast for 2025 international trade growth from 0.9% to 2.4%. However, forecasts for 2026 predict a slowdown to 2.9%, compared to a forecast of 3.3% a year ago. Experts point out that this "readjustment" of trade dynamics will create winners and losers, with large economies benefiting and smaller ones looking for new survival strategies.
This shift is also a cause for concern. "The transition from a system of rules, where all players comply in a common framework, to another where each country operates on its own, will be much harsher for small economies," warns Eswar Prasad, a professor at Cornell University.
Restructuring
An example is tiny East Timor, the newest member of the WTO. With a population of only 1.4 million. and a GDP per capita of about $1,300, the Southeast Asian country suffered years of instability after independence from Indonesia in 2002. Despite the Trump administration's efforts to inactivate the WTO by cutting its funding, Antonio da Conceição, East Timor's representative at the UN Office in Geneva, remains optimistic that membership will help his country wean itself off oil by opening up new markets for coffee, vanilla and fruit. "We are a country that can start learning from others," says Shirley, who began his country's WTO accession process as trade minister in 2012-2015.
In practice, the effects of US trade policy are felt even by small businesses. Ben Knepler, owner of True Places in Pennsylvania, which designs outdoor furniture and produces it in Cambodia, was forced to stop sales in the US due to high tariffs. Now he is looking for buyers outside the US, saying: "It's a bit absurd to be an American company and not sell in America, but here we are."
"It's very clear that we're redrawing the map of international trade," says Ina Simonovska, an associate professor of economics at the University of California, Davis. "We will see a lot more bilateral trade agreements between countries or subgroups of countries," he predicts.
Adaptation – Editing: George D. Pavlopoulos
