Global Trade in 2026: Resilience Amidst Shifting Sands
Despite ongoing geopolitical tensions and trade policy adjustments, global trade demonstrated resilience in 2025. This momentum is expected to continue into 2026, though navigating the complexities will be crucial for businesses of all sizes. The international trading environment remains under pressure, but recent developments suggest cooperation remains possible and consequential.
The Importance of Predictable Market Access
For many economies, particularly in sub-Saharan Africa, predictable market access is as vital to macroeconomic resilience as it is to commercial performance. The African Growth and Opportunity Act (AGOA) continues to support export sectors in 32 sub-Saharan African countries, including 21 least developed nations, in areas like textiles, agriculture, and light manufacturing. Similarly, the continuation of HOPE and HELP programs remains important for Haiti’s export industries.
These programs, while representing a modest share of total United States imports, underpin employment, foreign exchange earnings, and fiscal stability in beneficiary economies. Stable access allows governments to plan, firms to invest, and workers to build livelihoods with greater certainty.
Regional Agreements as a Signal of Cooperation
The conclusion of the Association Agreement between the European Union and MERCOSUR (Argentina, Bolivia, Brazil, Paraguay, and Uruguay) after extended negotiations is a significant signal. Its importance extends beyond tariff schedules, demonstrating that negotiated arrangements remain attainable even in a contested environment. Such outcomes are particularly consequential for developing economies, linking trade to diversification and value addition.
Consistent rules and credible expectations are essential for this process. When policy becomes discretionary, complexity increases, compliance costs rise, and policy space narrows. Larger economies may be able to manage this volatility, but more vulnerable nations face sharper constraints.
The Need for WTO Reform
Members of the World Trade Organization (WTO) will convene in March to update and reform elements of the trade rulebook. This reform requires more than simply defending existing frameworks; it demands a willingness to update them to reflect contemporary economic realities. The system must evolve to encompass contemporary supply chains, digital exchange, and evolving production patterns.
If the rulebook fails to evolve alongside economic realities, markets will adapt around it, making it increasingly difficult to restore coherence. Timing is critical.
Supply Chain Adjustments, Not Disappearances
Supply chains are adjusting, not disappearing. Fragmentation remains a risk, but not a foregone conclusion. Outcomes will depend on whether interdependence is managed through credible frameworks or through accumulating unilateral measures. Predictability is key – not preserving past arrangements, but providing clarity for investment, diversification, and long-term planning.
Weakening confidence has far-reaching effects, extending beyond markets and impacting development trajectories and social cohesion. Clear, consistently applied rules provide countries, particularly those building productive capacity, with the space to expand opportunity and strengthen resilience.
Trade Policy and Global Stability
Trade policy influences more than just commercial flows; it impacts development and stability. Preserving credibility doesn’t mean resisting change, but ensuring that reform strengthens coordination and restores confidence. In an interconnected world, stability depends on agreements that are credible, adaptable, and consistently applied.
Did you recognize? Tariff fraud tends to rise as tariffs increase, prompting stepped-up enforcement efforts.
Navigating the Complexities: Key Trends
Several trends are reshaping the supply chain landscape. Firms are considering reorganizing supply chains to mitigate exposure to risk, turning toward strategic sourcing and rerouting goods. “Nearshoring” and “friend-shoring” are gaining traction, though the gap between intention and ability to change remains significant. Since 2017, firms have increasingly used connector countries to avoid tariffs, lengthening supply chains and increasing their vulnerability.
Pro Tip: Agility is becoming more important than pursuing the lowest-cost destinations when making sourcing decisions.
Frequently Asked Questions
Q: What is “friend-shoring”?
A: Friend-shoring involves relocating supply chains to countries with shared values and geopolitical alignment.
Q: How are tariffs impacting businesses?
A: Increased tariffs raise the cost of imported goods, forcing businesses to either absorb the costs or pass them on to consumers, potentially reducing profit margins.
Q: What is the role of the WTO in addressing these challenges?
A: The WTO is tasked with updating and reforming trade rules to reflect contemporary economic realities, including supply chain dynamics and digital trade.
Desire to learn more about navigating global trade challenges? Explore our resources or subscribe to our newsletter for the latest insights.
