As Donald Trump continues to unleash havoc on allies and trading partners, countries are scrambling to forge new alliances and mend broken ones as they try to shield themselves from a mercurial American president.
The past few months have seen a flurry of diplomatic moves by governments seeking to lessen their reliance on the United States, including among countries that had long nursed grudges against one another.
Recommended Stories
list of 4 itemsend of list
“Countries are trying to diversify economic and security partnerships,” Vina Nadjibulla, vice president at the Asia Pacific Foundation of Canada, told Al Jazeera.
“Many US allies, especially in the Indo-Pacific region, won’t decouple from the US – the US is too important, especially for security – but they are all looking for a US-plus strategy to minimise risk,” Nadjibulla said.
European Commission President Ursula von der Leyen is set to travel to Australia after the Munich Security Conference this weekend to push through a trade and security deal that has been in the works since 2018.
The trip comes on the heels of security and trade agreements that the European Union has lined up with the United Kingdom, Canada and, most recently, India, and weeks after the bloc signed a trade pact with Argentina, Brazil, Paraguay and Uruguay.
“It is difficult to overstate the disruption Donald Trump has inflicted on the global trading system,” Robert Rogowsky, adjunct professor of trade and economic diplomacy at Georgetown University, told Al Jazeera.
But Trump has also underestimated the world’s middle powers, said Rogowsky, referring to Canadian Prime Minister Mark Carney’s call at the World Economic Forum in Davos, Switzerland, for smaller countries to unite and show “genuine cooperation” as leading powers turn inwards.
“That resolve is rooted in a simple reality. For many countries, economic stability is a matter of national survival. Faced with repeated shocks from Washington, they can’t remain dependent on an increasingly erratic trading partner,” Rogowsky said.
Last month, Carney became the first Canadian leader to visit China in nearly a decade, seeking to reset ties that had been frozen since Canadian authorities arrested a top official of Chinese telecommunications giant Huawei in December 2018.
During Carney’s meeting with Chinese President Xi Jinping in Beijing, the two leaders agreed to slash tariffs on certain goods and allow up to 49,000 Chinese electric vehicles into Canada with minimal tariffs.
Last week, Canadian Industry Minister Melanie Joly said her government was working with China to launch a joint EV assembly facility in Canada to export to the world.
The move marks a significant departure from Canada’s previous efforts to restrict China’s EV industry, including a 100 percent tariff on imports introduced after a similar move by the US.
Canada is also trying to rebuild ties with India, another key trading partner, after years of tensions over the killing of a Canadian Sikh activist, with Carney expected to visit New Delhi in the next few months.
‘Reconfiguration of trade’
“The reconfiguration of global trade is under way,” Rogowsky said.
Although remaking supply chains and trade relationships that evolved in the aftermath of World War II will be neither quick nor easy, particularly when they involve the world’s largest economy, “the pace of change is accelerating”, he added.
While two-way trade between the US and 19 of its trade partners grew slightly last year, total global trade grew much faster, according to Gary Hufbauer, nonresident senior fellow at the Peterson Institute of International Economics.
In dollar terms, US trade with its partners grew 3.6 percent, compared with a 6.3 percent increase in global trade, he said.
One reason for the marginal change in US trade, despite Trump’s tariffs and threats, is that many countries ramped up their exports in anticipation of new taxes. Deeply embedded supply chains also take time to change.
“There is no doubt Trump has shaken the world trade order. Most importantly, trading rules once agreed in the WTO, or FTAs, no longer bind the US,” Hufbauer told Al Jazeera.
“From a diplomatic standpoint, trust in the US has dropped to a post-Second World War low. Carney is right to describe the current geopolitical context as a ‘rupture’ from the past 80 years.”
Hufbauer said he expected to see further trade diversion away from US trade this year.
“There is a lot of geopolitical uncertainty, and countries are proactively looking to hedge,” Farwa Aamer, director of South Asia Initiatives at the Asia Society Policy Institute, told Al Jazeera.
“It’s almost like trade agreements and partnerships today are strategic signals that there are friends and partners beyond Washington. However, there is a parallel effort in keeping ties with Washington as stable as possible. It is a big market and carries major global weight. A stable relationship with the US is pragmatic.”
