Washington: US President Donald Trump’s aggressive tariff strategy may have shaken the global trading system, but it has failed to bring world commerce to a standstill. His administration has repeatedly threatened trading partners with higher duties, imposed sweeping tariffs and challenged long-standing rules governing international trade. Yet global trade continues to expand at a pace far above the average recorded over much of the past decade. World trade grew by nearly 8% in 2025, around five percentage points faster than global economic growth, while momentum has remained strong in 2026.
The latest figures underline the resilience of international commerce. During the first six months of 2026, global merchandise trade reportedly increased by 12.5%, while services trade climbed 10.5%. Although higher prices for commodities, food and energy contributed to part of the rise in trade value, the increase in actual trade volumes is even more significant. UN Trade and Development data indicate that much of the 2025 expansion came from higher volumes rather than simply higher prices. At the same time, despite exemptions and legal challenges, the effective average US tariff rate has risen sharply from roughly 2.4% in 2024 to around 11% under Trump’s second administration.
So why has Trump’s tariff offensive failed to derail global trade? One major reason is that the United States accounts for less than 15% of global trade, leaving the vast majority of international commerce outside Washington’s direct control. Most countries have also avoided an all-out tariff war, preferring negotiations and new trade arrangements instead. Vietnam and Taiwan, for example, have moved to reduce barriers on US goods while maintaining access to the American market under new tariff arrangements. Rather than simply retreating, businesses are rapidly redesigning supply chains and shifting production and sourcing to alternative countries.
Trump’s tariff strategy has therefore produced an unexpected consequence: globalisation is changing shape rather than disappearing. Pressure on Chinese exports to the US has encouraged companies to diversify production across Asia, while China continues to expand exports into other markets. Vietnam’s exports to the United States have surged, highlighting how trade routes are being redirected. Meanwhile, the explosive growth of artificial intelligence is creating enormous demand for semiconductors, advanced computing equipment and data-centre infrastructure. Ironically, some AI-related imports have received tariff exemptions from the Trump administration, underscoring the difficulty of using tariffs without disrupting critical technology supply chains.
India is also emerging as a major beneficiary of the changing trade landscape. Despite facing steep US tariffs, India’s merchandise exports rose 19% in 2025-26, while services exports increased by 10%. Even more striking is the shift in India’s trade relationship with China. China has overtaken the United States to become India’s largest trading partner, with bilateral trade reaching around $150 billion in 2025-26. China is now the largest trading partner for 151 countries, compared with 57 for the US. Trump’s tariff offensive, therefore, may have been designed to push the world away from globalisation—but instead it is accelerating a dramatic rebalancing of global trade, supply chains and economic power.
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