Introduction

The global trade system has changed. As the world’s economic relations are rebalancing, with an uncertain outcome, countries seek to protect their interests and existing partnerships. Unfortunately, the United States has been retreating from leading the global economic system, treating (and threatening) friends and foes alike. Additionally, the World Trade Organization (WTO) is not perceived as a sufficient intermediary for addressing trade negotiations and disputes.

China, on the other hand, wants to rewrite the global trade rules. High-income countries are concerned about Chinese overproduction and the pathway to becoming the “world’s factory.” Developing countries have an even-more pressing challenge, as Chinese subsidies are curtailing their local industries’ growth path, and their innovations can create a technological path dependency.

These changes are unfolding in an already convoluted context. Each region of the world faces historical challenges, from the illegal invasion of Ukraine in Europe and extended conflicts in the Middle East to unprecedented internal migration in Latin America and developmental hurdles in Africa that compound one another, as well as the rise of middle powers, particularly in Asia and the Gulf. Moreover, the upcoming years will be crucial for the diffusion of artificial intelligence (AI).

In this context, members of the Global Trade and Innovation Policy Alliance (GTIPA) from 17 countries have come together to analyze how each economy is responding to this new cycle of global trade. The Information Technology and Innovation Foundation (ITIF), based in the United States, prepared a questionnaire with the following questions to assess how countries outside America are reacting to the trade war:

1. What is your country’s strategy to face the ongoing blanket tariffs (and retaliatory tariffs if applicable) announced by the United States government? For your response, consider economic authorities and private stakeholders, including foreign companies investing in your country.
2. How have economic policy priorities shifted due to the trade war and tariff uncertainty?
3. How do you think the economic activity in your country will be affected by the ongoing trade war? Consider the short term (the remainder of 2025) and the medium term (next two to three years).
4. How do you see your country’s trade partnerships and priorities shifting?
5. How do you envision China’s presence in your region and country changing due to America’s tariffs?
6. Is your country implementing extraordinary measures to reduce vulnerability to external trade shocks due to the ongoing trade war?

The think tanks participating in this analysis are based in Argentina, Australia, Bangladesh, Brazil, Bulgaria, Canada, Chile, Germany, Italy, Jordan, Mexico, North Macedonia, Pakistan, Peru, Poland, and South Africa. The responses were gathered between May 1 and June 6, 2025.

Read the full report.