Global Trade Weathers Iran, Ukraine and Trump\u2019s Tariffs<\/p>\n
Reporter<\/p>\n
September 30, 2026 | 11:09 am<\/p>\n
TEMPO.CO, Jakarta - From COVID to Donald Trump\u2019s tariffs \u2014 with wars\nin Ukraine and the Middle East in between \u2014 world trade policy is\nenduring the most unpredictable period of the postwar era.<\/p>\n
The pandemic shut factories worldwide and accelerated a shift away\nfrom China, the world\u2019s largest manufacturer. The two conflicts then\ndisrupted global supplies of oil and gas, food and fertilizer.<\/p>\n
US President Donald Trump\u2019s tariffs, meanwhile, pushed US duties to\ntheir highest level in decades, forcing firms to find new suppliers and\nmarkets.<\/p>\n
Robert Staiger, chief economist at the World Trade Organization\n(WTO), calls the turmoil \u201cthe most serious and sustained disruptions\nsince the [world trading] system was created 80 years ago.\u201d<\/p>\n
Goods trade buoyed by AI demand<\/p>\n
Despite these shocks, global trade has remained surprisingly\nresilient.<\/p>\n
According to the WTO\u2019s annual report published last week, goods trade\nvolumes rose 4.6% last year, lifted by strong demand for the advanced\ntechnology behind the artificial intelligence (AI) build-out. Services\ntrade volumes grew by 5.3%.<\/p>\n
China remained the world\u2019s largest goods exporter, while the United\nStates was again the largest importer. The European Union came in second\nin both.<\/p>\n
However, Staiger told AFP news agency last week that strong AI\nexports \u201cmay be masking some of the drop in world trade that might\notherwise be occurring.\u201d<\/p>\n
The WTO noted in its March trade outlook that Asian countries\ndominated the AI goods trade, while Africa, Latin America, the Middle\nEast and much of Europe barely showed up.<\/p>\n
AI-related tech accounted for about one-sixth of goods trade but\nclose to half of global trade growth.<\/p>\n
Washington sidesteps WTO rules<\/p>\n
Since returning to office last year, Trump has continued to pivot\nfrom WTO rules on global trade.<\/p>\n
The US president has set country-specific duties, breaking the WTO\u2019s\nequal-treatment rule. He has since negotiated exemptions and\n\u201creciprocal\u201d tariffs with individual countries.<\/p>\n
Despite this, globally, about 72% of goods are still traded on the\nGeneva-based agency\u2019s core terms, down from roughly 80% in 2022.<\/p>\n
On a longer horizon, though, globalization appears to have stalled.\nWTO data shows that since about 2015, world trade has grown only as fast\nas the global economy. Despite the recent geopolitical upheavals,\nglobalization has yet to shift into reverse.<\/p>\n
Policymakers and economists say it is too soon to know whether the\nwars, alongside a pivot toward protectionism in the US, China, the EU\nand post-Brexit Britain, mark the end of an ever-interconnected\nworld.<\/p>\n
\u201cThe world is certainly not becoming more globalized,\u201d Thomas\nSampson, an associate professor at the London School of Economics, told\nDW. \u201cBut it\u2019s still an open question whether we\u2019re actually at\ndeglobalization or just shifting around who we trade with.\u201d<\/p>\n
How global trade is changing<\/p>\n
Since Russia\u2019s full-scale invasion of Ukraine in February 2022, the\nEU has sharply cut its reliance on Russian pipeline gas from 37% in late\n2021 to around 10%, according to Eurostat, the bloc\u2019s statistics agency.\nEU oil and coal imports from Russia are now negligible.<\/p>\n
These moves spurred new energy deals with the US, Norway, Australia\nand Kazakhstan, with liquefied natural gas (LNG) replacing Russian\npipeline gas.<\/p>\n
Moscow did find new energy buyers \u2014 notably China and India \u2014 which\ntook Russian oil at a large discount to global benchmark prices.<\/p>\n
Camille Reverdy, an affiliate fellow at the Brussels-based think tank\nBruegel, doubts whether the EU will rekindle its energy trade with\nMoscow when the war ends.<\/p>\n
\u201cIf the alternatives become reliable sources, I don\u2019t see it coming\nback,\u201d Reverdy told DW.<\/p>\n
When the Iran war began in late February, Tehran effectively shut the\nStrait of Hormuz, one of the world\u2019s most critical energy transit\nchokepoints. Saudi Arabia and the United Arab Emirates sent some of the\nmissing oil by pipeline to alternative ports.<\/p>\n
According to the International Energy Agency, the world also replaced\nthe missing millions of barrels with increased production from the US,\nKazakhstan, Brazil and Venezuela. Several nations have also tapped about\n300 million barrels from their strategic oil reserves, Reuters reported\nin August.<\/p>\n
Almost seven months into the conflict, energy prices remain elevated,\nwith Brent crude trading above $100 for much of the war. Several\nanalysts are now warning of dangerously tight supply in the fall and\nwinter.<\/p>\n
The squeeze from Trump\u2019s tariffs is also weighing on trade.<\/p>\n
US imports from China, for instance, fell by around 28% last year,\naccording to the Washington-based Peterson Institute for International\nEconomics. At the same time, its imports from the rest of the world\nclimbed by nearly a tenth \u2014 much of it from Vietnam, Taiwan and Mexico,\nas part of rerouting efforts to cut reliance on Chinese suppliers.<\/p>\n
Will Trump\u2019s strategy outlast him?<\/p>\n
Trump\u2019s attacks on the WTO have raised a sharper question. If the\nGeneva-based body were shelved, what would replace it? Experts have\nfloated several alternatives.<\/p>\n
These include continuing Trump\u2019s country-by-country tariffs or a web\nof free trade deals between economic blocs, including BRICS nations of\nthe Global South.<\/p>\n
The third, mooted by think tanks like Chatham House, would see the\nEU, Japan, Canada, Australia and Mexico keep trading by WTO-style rules\nat a scale the US and China could not ignore.<\/p>\n
Bruegel\u2019s Reverdy thinks the EU would prefer a reformed WTO to the\nalternatives.<\/p>\n
\u201cThe EU still wants to be seen as the leader of free and multilateral\ntrade,\u201d she told DW, noting how Brussels has added new layers of trade\npolicy, including possibly making Canada an associate member.<\/p>\n
LSE\u2019s Sampson warned that continuing with Trump\u2019s \u201claw of the jungle\u201d\nwould disadvantage smaller countries, who he said have a \u201cbigger voice\u201d\nunder the current WTO system.<\/p>\n
Noting how \u201ctrust in the US as a trading partner has collapsed,\u201d\nSampson told DW it cou<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/global-trade-weathers-iran-ukraine-and-trumps-tariffs-1790743875", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }