Global trade is a minefield in the Trump era: wherever world leaders step, they risk igniting a new conflict with the Trump administration — trade deal or not.
Why it matters: President Trump's constant tariff threats have pushed U.S. trading partners to diversify away from American markets. But even that carries its own risks, as Trump vows to punish allies who turn elsewhere.
The big picture: In the opening weeks of the year, Trump has sought to assert his dominance over global trade in at least three new ways.
1. Threatening retaliation over China ties.
- Trump said he would impose an additional 100% tariff on Canadian goods if Prime Minister Mark Carney — whose blunt Davos speech irked Trump — moved ahead on a trade deal with China.
- Carney agreed earlier this month to reduce trade barriers after a visit to Beijing, where he called Canada's relationship with China "more predictable" than its current ties with the U.S.
- Trump's threat doubles as a warning to British Prime Minister Keir Starmer, who visited Beijing this week after years of frosty relations between the U.K. and China.
2. Threatening retaliation over trade deal delays.
- Trump threatened this week to raise tariffs on South Korean goods, potentially restoring levies to the pre-deal rate of 25%.
- The rationale: Trump said South Korea's legislature was not moving quick enough to finalize its U.S. investment pledges. (None of the Trump 2.0 trade deals have been ratified by Congress.)
- Trump's top trade official, Jamieson Greer, told Axios at the World Economic Forum last week that Europe was also lagging in ratifying the U.S.-EU trade deal.
3. Blowing up existing trade deals.
- Trump backed off his market-rattling threat to impose tariffs on NATO allies over Greenland — but the episode underscored his willingness to revive tariff threats even against partners with signed agreements.
- That uncertainty has become a running theme: deals that once provided predictability to Wall Street and corporate America can now be tossed aside at any moment, for seemingly any reason.
- Trump has claimed that the U.S.-Mexico-Canada Agreement (USMCA) — his signature first-term overhaul of NAFTA — is "irrelevant" to the U.S.
What to watch: Trump dismantled the trade architecture that governed global commerce for decades. Now America's top partners are accelerating efforts to strike alternative deals in a world shaped by his tariffs.
- After announcing a free trade agreement last year with a major bloc of South American countries, the EU this week unveiled a massive deal with India aimed at bringing "stability" amid "turmoil in the global order."
- "They should do what's best for themselves, but I will tell you ... I find the Europeans very disappointing," Treasury Secretary Scott Bessent, one of the administration's leading voices on trade, told CNBC this week.
For the record: "President Trump has raised tariffs on countries we have trade deals with in two distinct situations: when countries fail to hold up their end of a trade deal, and when countries have other disputes with the United States," White House spokesperson Kush Desai told Axios in a statement.
- Desai said that "just because tariffs are off the table as it relates to trade doesn't mean that tariffs are off the table for other, non-trade matters. He added that the administration has "consistently upheld our word and honored our agreed-upon commitments."
The bottom line: A shift away from U.S. trade may offer insurance, but it increasingly comes with its own hefty price tag.
