"Since Donald Trump's return to the White House in 2025, the United States has massively increased its tariffs. As a result, trade flows to the US have been disrupted, but has this affected the dynamics of global trade? And above all, are we heading towards a major restructuring of global trade? Welcome to this new episode of Macro Waves, the podcast from BNP Paribas Economic Research.”
Stéphane Colliac: Today, we are discussing a topic that had the markets shaking in April: the tariff offensive led by the United States in 2025. The change is significant. Let's take two examples. The first is that of a German automaker. You export three-quarters of your production. Your market share in China is already declining, but you had a growth driver in the United States, where, until 2024, your cars were subject to very low taxes. But, in 2025, the introduction of 15% customs duties on cars shatters this dynamic. The result? You try to turn to other outlets, but there aren't enough of them, and you have to curtail your production. Second example: you are a Chinese exporter of electrical equipment. The US market is becoming more uncertain, with customs duties having increased by 30pps, but against all odds, your exports are holding up well. Not only are they not collapsing in the United States, but they are continuing to increase in other areas. I am Stéphane Colliac, an economist, and I will be talking about the reconfiguration of international trade with Anis Bensaidani and Guillaume Derrien, economists in the Advanced Economies team at BNP Paribas Group Economic Research. Anis, can you provide us with a summary of the events of the last few months?
Anis Bensaidani: Since Donald Trump's return to the White House, the United States has massively increased its customs duties, first in April and then this summer, targeting both specific countries and sectors. As a result, the average effective tariff has increased from nearly 2% in 2024 to nearly six times that amount today. And the consequences are far-reaching, in view of the size of the United States, which is the final destination for 15% of global goods exports.
Stéphane Colliac: Why did the United States introduce these measures? And which sectors are the most affected?
Anis Bensaidani: The primary objective is to narrow the US trade deficit and generate new resources to finance the budget deficit. As such, it is leveraging its economic weight, as it is a market that other countries often cannot do without. The increase in customs duties aims to reduce a competitiveness gap and goes along with incentives to expand production in the US. All this is happening in strategic sectors like automotive, steel, aluminum, and pharmaceuticals. As a result, vehicle imports are already decreasing in the US.
Stéphane Colliac: What are the immediate consequences of these massive tariff increases on international trade? How are businesses reacting, Guillaume?
Guillaume Derrien: There are multiple consequences. The first is the very strong volatility that these measures generated in global trade in the weeks preceding and following the Liberation Day tariffs announcement in April, with sharp rise in Q1 and a mechanical decline in Q2, as well as very pronounced sectoral effects (decline in the automotive sector, surge in the pharmaceutical sector). The US tariff shock also highlighted, and this is certainly the most striking dynamic, the resilience of global trade flows. While imports declined in Q2 in the United States, they are up in most other regions of the world, whether in Europe (+2.5% in Q2), within ASEAN or in Latin America. Trade flows affected by the new US tariffs account for only 9% of global trade. Global trade has thus been able to continue its upward trend, with growth currently at a pace comparable to that of 2024.
Stéphane Colliac: We understand that this swift restructuring of global trade has not occurred in the same way across all countries and regions. Is this observation accurate?
Guillaume Derrien: Good question. What we have seen is that exports from Asia have remained particularly strong this year, despite relatively prohibitive US tariffs. China has managed to redirect a significant portion of its exports from the US to Europe, where the demand structure is similar to that of the US, and to its Asian partners. Conversely, European countries that are heavily dependent on the US market – Germany and the United Kingdom (I am excluding Ireland) – have not managed to generate sufficient new outlets to offset the decline in US demand.
Stéphane Colliac: Anis, can we identify any other losers? And could these issues get worse?
Anis Bensaidani: We can mention all the countries and sectors for which the United States is a major market, and which cannot find alternatives in the short term. In terms of countries, Canada, whose exports of goods have already declined in the first half of 2025, and, to a lesser extent, Germany are good examples.
In terms of sectors, the automotive and metallurgy industries are the most affected. Unfortunately, others could follow. The possibility of sectoral tariffs continues to be explored in the United States for strategic products such as pharmaceuticals and semiconductors. Next, the Supreme Court must rule on the legality of reciprocal tariffs: a ruling against the administration would probably result in compensation in the form of new sectoral tariffs. Finally, in terms of international relations, there is still no formal agreement between the United States and China, and beyond trade relations between the two global superpowers, new trade conflicts may emerge.
Stéphane Colliac: Faced with these risks, what is your scenario for the short and medium term? Any thoughts, Guillaume?
Guillaume Derrien: Uncertainty remains high. However, it should be noted that free trade, even under attack from US measures, remains on solid footing. The reactions we have seen since Trump's return in 2025 are certainly partly retaliatory measures (export restrictions), but I note that trade partnerships have increased in recent months with the aim of diversifying markets or strengthening existing ones: for example, the European Union has just confirmed an agreement with Mercosur and sealed one with Indonesia. This situation also provides an incentive to strengthen strategic autonomy policies, which are also levers for internal growth. The implementation of a common defence effort in Europe is already having an impact.
Stéphane Colliac: Would you care to offer a concluding remark, Anis, on this reconfiguration of trade links?
Anis Bensaidani: We can draw a continuum between various measures adopted in recent years by major countries. Each one is seeking to develop its local production in order to limit imports. That was the aim of China 2025. And it is also the purpose of US tariffs. The time has come, more and more, to develop the domestic market. It is more protected, but also more subsidized. And while its trade deficit with China continues to grow, the European Union, and Germany in particular, must take more initiatives to equip itself with the tools to face global competition as it exists today. Protecting itself when prices, particularly those charged by China, are too low, developing the internal market and a competitive offering by reducing internal barriers, while remaining open to the world in order to benefit from new opportunities wherever they may arise.
Stéphane Colliac: In a nutshell, the US tariffs have disrupted trade flows, but the world is adapting. China and Emerging Asia are benefiting, while the centre of gravity of world trade is likely to shift further away from the United States. One thing is certain: global trade is not standing still; it is reinventing itself.
Stéphane Colliac: Thank you, Anis and Guillaume, for this very interesting discussion. Thank you also to our listeners for joining us. We will continue to monitor developments in international trade in the Trump era, and we invite you to read our analyses on the BNP Paribas Economic Research website. We particularly recommend our latest issue of EcoPerspectives, a publication dedicated to advanced economies, in which we focus on the reconfiguration of global trade. All links are in the description. See you soon for a new episode of Macro Waves.
Publication:
EcoPerspectives — Advanced Economies | 3rd Quarter 2025– Economic Research – BNP Paribas
