The Future of Trade: Tariffs, Taxes, and Economic Trends 

Three certainties amid global trade uncertainty

Uncertainty is the word de jour. For months, business leaders have lamented how difficult it is to plan, especially with unpredictable changes in trade tariffs. The latest US trade announcements don’t change that. Even with supposedly ‘locked-in’ import tariffs, past moves suggest little is permanent.

Many firms are now waiting for clarity before making any major moves. Why invest in expanding production or hiring new staff if you don’t know what the future trade outlook will look like or how import taxes might shift?

Against that turbulent backdrop, here are three truths you can hang your hat on:

1. Global trade is already falling.

There’s a narrative in the US and elsewhere that the global economy has withstood the test of trade tariffs-duties have been in place for months, and trade is still standing. But the reality is less rosy. After an initial rush by firms to beat tariffs, trade is tumbling.

While it’s still too early to show up in most official sources, our Maritime Trade Index, a daily gauge of global shipping, shows trade volumes are more than 2% lower than a year ago. In the US, seaborne imports have fallen by around 8%.

2. Tariffs are here to stay.

President Trump has had multiple opportunities to unwind tariffs. He could have used the pause in April after the initial ‘Liberation Day’ tariffs were announced to reset policy. He could have done the same when the pause was extended in July. Or he could have left the base 10% import tax intact in early August rather than forge ahead with economy-specific levies of up to 40%.

The fact that he let each of these opportunities pass confirms that tariffs will be higher for longer. And not just during Trump’s term. Tariff revenue is now baked into the US budget, making it difficult for policymakers of any persuasion to wean themselves off the windfall. Remember, President Biden kept Trump-era tariffs in place during his term.

It’s time to stop waiting for tariffs to fade and acknowledge they’re part of the baseline.

3. Tariffs and politics are inseparable

US trade policy is serving multiple, sometimes competing, objectives, from national security and geopolitics to domestic political gain. Tariffs targeting China, Canada, Mexico, and Brazil are as much about projecting influence or shoring up support at home as they are about rebalancing trade. This mix of motives means US trade policy will be more volatile going forward.

Given these three realities – a world where trade is falling, tariffs are business-as-usual, and politics shapes economics, what can firms do to mitigate risks and get ahead?

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