Our Trading Partners Are Moving On, Circumventing USA

James Bacchus

As the United States, under President Donald Trump, endeavors to coerce international trading partners through economic leverage to address both its trade and non-trade concerns, those trading partners are increasingly simply circumventing the United States. 

On April 2, 2025, not long after beginning his second term, President Trump, in violation of international trade law and US treaty commitments as a member of the World Trade Organization (WTO), announced steep and sweeping global tariffs on imported products from nearly all countries. He called them his “Liberation Day” tariffs. They were only the beginning. More and more tariffs have since been applied by the US, both globally and on individual countries and their products, even as some of Trump’s supposedly “reciprocal” tariffs have been overruled by the Supreme Court. 

This onslaught of American tariffs, however, has not had the intended effect. Instead of making the rest of the world even more dependent on trade with the US, the supposed “Liberation Day” tariffs have inspired US trading partners to proclaim their own “Liberation Day” from the US market. The once-leading trading partners of the US are now going to great lengths to tilt their trade policies away from the US and toward more trade with the rest of the world. 

Where the United States has embraced trade coercion, many of its trading partners have heightened their trade cooperation, leading to further economic integration that excludes the US. Where the US no longer even tries to hide its protectionism, many US trading partners are mostly maintaining their commitments to further trade liberalization and concluding new trade agreements to achieve it—agreements that exclude the United States. 

Intense American media and political focus on President Trump’s unpredictable trade maneuvers has largely obscured a broader trend of increased global integration outside the US. Several examples of new and evolving trade arrangements between other groups of countries that do not involve the US are evidence of this new Trump-caused trend in world trade. It’s a trend that seems bound to gain momentum in the absence of any sign the US intends to return to its historical bipartisan policy of lowering tariffs and other barriers to trade and upholding the international rules of trade that find their most important expression in the rule-based multilateral trading system of the WTO. 

Although numerous examples could be cited, this trend is amply evidenced in the new trade agreement between the EU and India, the new trade agreement between the EU and the MERCOSUR (Mercado Común del Sur, or Southern Common Market) countries of South America, new trade agreements involving MERCOSUR and other Latin American countries, the implementation of the African Continental Free Trade Area (ACFTA), and the ongoing evolution of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

I explain this emerging trend in world trade in my new Cato briefing paper, “The Other Liberation Day: The Liberation of the Rest of the World from Trade with the United States,” which can be found here.