Tariffs, Trade, and Global Shifts: What Comes Next?
On Tuesday, April 29, in partnership with the Hinrich Foundation, the Association of Foreign Correspondents in the United States (AFPC-USA) hosted an educational program for international correspondents, exploring the evolving landscape of global trade and tariffs. As the world navigates the economic impact of policies introduced during the first three months of the second Trump administration—and anticipates further developments in 2025—this program offered an expert-led evaluation of key shifts in international trade dynamics.
The program featured two distinguished experts from the Hinrich Foundation with whom we’ve previously collaborated: Deborah Elms, the trade-focused philanthropy’s Head of Trade Policy, and Keith M. Rockwell, the Foundation’s Senior Research Fellow. The session was moderated by Bloomberg News correspondent James Mayger and provided insights into how tariff policies have reshaped global commerce and what the future may hold amid changing geopolitical and economic priorities. The program is designed to equip foreign correspondents with the context and knowledge necessary to report on trade, tariffs, and global economic shifts with accuracy and depth.
AFPC-USA is responsible for the structure and the development of this program. Below, foreign correspondents will find a summary of some of the most important takeaways from the presentation.
On How We Got Here
Elms likened the state of global trade to a “beautiful, stunning ceramic vase” — the product of 80 years of international cooperation and careful design. But, as she put it, “in January of 2025, when Donald Trump… knocked the vase onto the floor,” the global trading system fractured. While trade and globalization aren’t over, she emphasized that “what we've spent all of this time and effort building is now going to need to be rebuilt from the ashes.”
Elms stressed that the world has gone from being “precariously perched on the edge of that table” to “staring at the pieces wondering where do we go from here.” She noted the challenge now is figuring out what comes next: “Are we going to make one vase or two… or a plate?” For journalists and policymakers alike, the task is to piece together what's left, identify what's salvageable, and communicate the implications of a world in which “the vase isn’t there anymore.”
Rockwell argued that the World Trade Organization (WTO) has been weakened by its failure to modernize its rules and its overreliance on litigation to shape global trade—a strategy he called "inoperable." He emphasized the unprecedented speed and scale of economic disruption over the past 100 days, citing collapsing port activity, plunging manufacturing indexes, lost sales, tumbling markets, and the dollar‘s value has been plunging and that is worrying, as signs that the global trade system is heading in a deeply troubling direction.
Rockwell forecasted serious economic consequences from the current trade rupture, beginning with “shortages” across a wide range of goods—from toys to “machine tools that are used to make the goods with the intermediate goods” imported from China. He emphasized rare earth minerals as a particular pressure point: “Over 90% of the processing of rare earth minerals takes place in China,” and with exports now halted, rebuilding that capacity in the US could “take years… maybe a decade.” These minerals are essential to everything from electric vehicle batteries to military hardware.
Deborah Elms
The impact extends beyond manufacturing inputs. US farmers, once responsible for 40% of China’s soybean imports, have permanently lost market share to Brazil, and Boeing planes are being returned by the Chinese—a loss “very hard to get back.” With reciprocal tariffs applied across the board, companies can’t simply reroute through Vietnam or Cambodia like they did in past trade tensions.
He warned that CEOs are already telling the White House “shelves will be bare at major retailers” and that “the Christmas holidays could be threatened.” Financial markets have also taken a hit, with the S&P 500 down 8% since Trump’s return to office, shaking confidence in retirement savings and spooking both consumers and investors.
But the most alarming development, Rockwell said, may be the US bond market: “If the bond market starts to tumble… faith in the US government to back up its bonds and bills has been shaken.” With Japan and China as the largest foreign holders of US debt — both recently targeted by Trump — they “hold a rather important Trump card.”
He also pointed to early warning signs in employment, especially in “dock workers, airline staff, [and] truck drivers,” which would suggest that “goods are not being moved.” Finally, he flagged unpredictable political aftershocks, noting surprise developments in Canada and Germany and shifting polls in Australia, all linked to Trump’s aggressive trade stance. “The pressure is all moving in one direction,” he concluded—and it's not a good one for the White House.
Rockwell argued that the current “political pressure,” early warning signs, and “market turmoil” have significantly “weakened President Trump’s negotiating hand.” He noted that key global players believe domestic backlash in the US will force Trump to “cave” before any talks reach a resolution.
He also highlighted the exclusion of major US trading partners—China, Canada, and Mexico—from the current negotiation framework, casting doubt on its effectiveness. Meanwhile, the European Union has openly criticized the US approach, saying it won’t “negotiate with a group that doesn’t know what it wants.” In response to US trade threats, the EU has prepared €300 billion in retaliatory measures, which Rockwell described as “a pretty big stick to wield.”
On What Might Happen Moving Forward
Elms expressed deep skepticism about the direction and coherence of US trade policy, suggesting that President Trump either “doesn’t have [a strategy] or he has many, and they’re all in conflict.” This lack of clarity, she argued, makes genuine negotiation nearly impossible: “What are you negotiating over if the other side doesn’t really know what they want?”
She noted that countries like Japan, Korea, and Vietnam have made proactive efforts to engage with the US, arriving “super prepared” with “binders full of ideas”—only to find the American side unsure and vague, sometimes requesting only “a two-page document with a few high-level points.” The result, she said, is not true negotiation but a “political agreement” being cobbled together to satisfy Trump within a short 90-day window.
Even if deals are announced, Elms cautioned, they may amount to little more than “a framework of an idea or a thought about an idea,” like buying a few planes — which doesn’t resolve the core problem of unstable and escalating tariffs. She emphasized that many of the most critical and high-value sectors (like semiconductors, autos, and pharmaceuticals) are being affected by sector-specific tariffs not even up for discussion.
Keith Rockwell
Ultimately, she warned that any agreements reached may be short-lived, as there’s no guarantee the administration won’t “rip up whatever agreement you had” and impose more tariffs.
Rockwell responded to Elms by reinforcing the idea that Trump’s trade demands are not just unclear—they’re often politically impossible for US partners to accept. He pointed out that “there is no way the European Union will negotiate its food safety standards” or “drop their regulation on the digital economy” just to satisfy American interests, due to overwhelming domestic political resistance.
He emphasized that even key allies like the UK and Ireland, who have strong pharmaceutical exports to the US, will not make concessions that threaten vital industries, especially when those industries involve American-designed drugs and patents. In Rockwell’s view, foreign leaders will always prioritize their political survival over appeasing Trump, saying plainly: “They're not going to side with Mr. Trump.” He added that another US demand—the elimination of the value-added tax (VAT)—is simply “an absolute non-starter,” underscoring how unrealistic Washington’s expectations have become.
Elms also warned of two particularly difficult US demands in its negotiations with Asian partners. First, Washington is reportedly pressuring these countries to restrict or reconsider their trade relationships with China. Yet, Elms emphasized that “we all in Asia have an agreement already with China,” often multiple, including bilaterals and regional free trade agreements like the ASEAN-China Free Trade Area (ACFTA) and Regional Comprehensive Economic Partnership (RCEP). It is unclear what the US expects—whether countries should avoid new agreements or dismantle existing ones—but any such shift would be extraordinarily complex and politically fraught.
Second, she described the demand to eliminate Chinese content from goods exported to the US as practically unworkable. This includes not just parts and raw materials but potentially investment ties or even personnel affiliations. Attempting to fully “squish Chinese content” from supply chains would impose massive economic disruption, especially for small and medium enterprises that rely on Chinese inputs. Elms warned that such efforts could provoke unemployment, factory closures, and “serious unrest” in affected countries, threatening the foundations of Asia’s economic development.
On the subject of using trade policy to support US industrial goals, Elms conceded that a well-structured, targeted use of tariffs could support specific sectors like shipbuilding if integrated into a broader strategy that includes workforce training and procurement pipelines. However, she made clear that this is not the approach currently being pursued. Instead, US trade policy under Trump has been “globally imposed” and “incredibly on-again, off-again,” creating deep uncertainty. This unpredictability has pushed many companies—including American multinationals—to reconfigure their global strategies. Firms are increasingly adopting a “US for US” model, where production for the US market is isolated from the rest of their global operations, while others are minimizing their US exposure entirely. Elms noted that even if tariff policies were suddenly reversed, the damage has been done: companies are now prioritizing resilience and risk mitigation in their supply chains over deepening US trade ties.
Rockwell also responded to the discussion on the viability of using trade policy and tariffs to reshore manufacturing by agreeing that such goals are attainable—but only under the right conditions. “It can be done,” he affirmed, but emphasized that success depends on embedding trade tools within a coherent, long-term industrial policy. “It has to be part of something that has an overall strategy to it,” he said, stressing that this requires careful planning and government investment.
Rockwell pointed to the Biden administration’s Inflation Reduction Act (IRA) and CHIPS Act as imperfect but significant examples of such a strategy. While these initiatives have caused “a great deal of indigestion globally,” they have also been effective in encouraging major companies—such as Taiwanese semiconductor manufacturers and European carmakers—to seek to boost US production by taking advantage of proposed US government incentives. These included tax benefits, research grants, and access to government support—none of which, he noted, were part of “any of the Donald Trump trade regime at all.” Rockwell concluded that if the goal is to bring back jobs and manufacturing, the smarter and more effective approach is to “carefully think this out and to provide incentives rather than threats,” highlighting a fundamental difference between a proactive industrial policy and a reactive, punitive trade agenda.
On the Legal Basis for the Trade Agreements the US is Currently Pursuing
When asked about the legal foundation for the trade agreements the United States is presently negotiating, both Elms and Rockwell offered frank, critical assessments.
Elms was direct in her appraisal, stating bluntly, “the short answer is there isn’t one.” She noted that while legal scholars are actively debating the issue, and lawsuits are “piling up,” particularly regarding the invocation of the International Emergency Economic Powers Act (IEEPA) as justification for tariffs, there is little clarity. She predicted that legal challenges stemming from the Trump-era trade actions—and perhaps the Biden administration’s approach—would persist for years, saying, “there will be legal cases that go on for, I don't know, probably maybe the rest of my lifetime.” Her broader point was that “it’s hard for me to take seriously questions about the legal basis” because the US has not consistently adhered to one.
Rockwell echoed Elms' concerns but rooted his argument in constitutional principle. He pointed to Article I, Section 8 of the US Constitution, which grants Congress the authority to regulate foreign commerce. While this authority has traditionally been delegated to the executive branch through Trade Promotion Authority (TPA)—also known as “fast track”—Rockwell emphasized that “TPA has elapsed.” As a result, any trade negotiations being pursued now without congressional authorization represent what he called a “power grab” by the executive. He criticized Congress for its inaction, describing it as “supine” and failing to defend its constitutional prerogatives.
In the past, Rockwell recalled, there was “tremendous jealousy on Capitol Hill” about protecting congressional control over trade, regardless of party. Although lawmakers often ceded negotiating authority to the president, major trade deals like North American Free Trade Agreement (NAFTA) or the United States Mexico-Canada Agreement (USMCA) were still subject to congressional approval. Without that process today, Rockwell warned, any new deal would fall into “legal limbo.” He concluded with a sobering question: “There’s the Constitution—whether that still means anything is a very important question.”
On Whether the Disruptive Impacts of These Tariffs Can Be Undone
Rockwell opened with a reflection on the global trade system's deterioration, suggesting that the world is now recognizing its past value: “Don’t it always seem to go, you don’t know what you’ve got till it’s gone.” He argued that the predictability and stability offered by multilateral trade rules—painstakingly built over “seven or eight decades”—had been a “foundation stone” of the global economy. While those rules may have needed updating, their erosion has led to increased uncertainty and weakened trust. On a micro level, he pointed to irreversible losses caused by trade instability. US farmers, for instance, are unlikely to regain market share in China, with competitors like Brazil stepping in, and China developing its own agricultural and aerospace industries. “You become an unreliable provider,” he said, and once trust is broken, it’s “very, very difficult to reestablish the confidence you need with your clients.”
Elms elaborated on the consequences of this instability, explaining that firms are already adapting by shifting trade activities to agreements that exclude the United States. Within Asia, companies are increasingly turning to frameworks like Association of Southeast Asian Nations (ASEAN) agreements, RCEP, and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)—many of which, she noted, have been “underutilized by firms.” Even if US trade turbulence were to end immediately, companies would still seek to reduce risk by operating within more stable legal structures, since “most governments will not just sort of rip up a legally binding agreement with their partners.” But she also warned of a more systemic consequence: the US example under Trump has made protectionist measures more politically palatable globally.
Elms cited Indonesia’s new commodity royalty policies as an example of governments thinking, “Why can’t we do Indonesia first?” Trump’s norm-breaking behavior had “opened Pandora’s box,” normalizing creative legal maneuvering and domestic-first economic strategies. “You’ve given license to a lot of creative thinking, especially in the protectionist space,” she said, suggesting that even if the US reversed course, the precedent would linger.
Rockwell supported Elms’ point by pointing to India as an illustrative case. Traditionally a protectionist and obstructive actor in global trade—eschewing agreements like RCEP and CPTPP and long known as a spoiler in WTO talks—India is now seriously negotiating with both the US and the EU. He speculated this shift may be driven by growing foreign investment or by Apple’s decision to move iPhone production from China to India. Regardless of the cause, Rockwell called it a “very interesting development” that validated Elms’ argument: when major powers abandon the rules-based system, others begin to see the strategic advantage of either mimicking or adapting to the changing norms.
On the Subject of Countries Concerned About Cheap Chinese Goods Flooding Their Economies
Elms responded by cautioning against the frequent and often imprecise use of the term “overcapacity,” particularly in relation to China. While acknowledging that some Chinese goods in particular may meet a fair definition of overcapacity, where “there is more production than there seems to be demand,” she stressed that “not every product out of China” fits this description and urged observers, especially journalists, to avoid conflating exporting with dumping. She questioned why this label is disproportionately applied to China and not other countries.
Elms emphasized that when global supply chains are disrupted or redirected—especially due to exclusion from the US market—firms, not governments, are typically the ones pivoting, seeking out new opportunities elsewhere in the world. In the short term, this may lead to goods being sold at a loss to clear inventory—actions that may resemble dumping—but she argued that this is not financially sustainable in the long run. Instead, she predicted an intensification of global competition in goods markets, especially as Chinese producers and others seek out alternative destinations. This poses a real threat, particularly to smaller economies and MSMEs (micro, small, and medium enterprises) in countries like Indonesia or Thailand, who may struggle to compete with the “size and the speed and the scale” of Chinese manufacturing.
Elms warned that this increased concentration of manufacturing—especially if “a handful of countries” end up dominating—raises serious questions for global development. If the traditional path of economic progression, from agriculture to light and heavy manufacturing to services, is disrupted or “broken in the middle,” it could severely limit development options for poorer countries. “Where do they go?” she asked, highlighting the looming challenge for policymakers and economists alike as the world grapples with the reshuffling of “80 years’ worth of economic integration.”
Rockwell reinforced this concern from a European perspective, describing overcapacity and dumping as a “huge issue” on the continent. He noted that the European Union has conducted multiple investigations—into electric vehicles, steel, and aluminum—and found “unequivocal” evidence that China is “subsidizing and dumping production on the market.” In response, European governments have begun crafting industrial policy tools similar to China’s own strategies.
Rockwell cited German Chancellor Friedrich Merz’s strong stance, including promises of more public funding for research and development (R&D) and manufacturing. A particularly notable development, he said, is the adoption of a Chinese-style demand: “You want to sell here, you got to make it here,” including technology transfers. These measures enjoy significant political backing within Europe and mark a dramatic shift in trade posture. Rockwell pointedly noted the irony that China, having long employed such tactics itself, would now find it “difficult... to say that’s not acceptable,” as other countries mirror its approach.
On the Subject of the US Abandoning Development Projects
Elms described the US withdrawal from development efforts, particularly in Asia, as “dreadfully unfortunate,” not only for American influence but for the communities globally—especially outside Asia—that had relied on US-funded aid projects. However, she stressed that the US is not the only player in the development space. In Asia, countries like Japan and South Korea provide substantial aid, albeit more quietly, and development assistance will likely continue, though it may evolve in form and focus.
Elms argued that developing countries should not rely solely on aid; rather, their future depends on attracting both donor-driven and commercial foreign investment. With global supply chains reshuffling and official development assistance (ODA) in flux, she emphasized the urgent need for these countries to become more appealing investment destinations, particularly to support rural and marginalized communities. She acknowledged the challenges, especially for economies transitioning from agriculture to services or advanced manufacturing but also pointed to underutilized trade potential within Asia itself. For example, rather than continuing to build supply chains aimed at US or European markets, regional producers might now tailor products to the needs of domestic or neighboring Asian consumers—such as Indonesians—in ways that foster local development and economic resilience. Amid the disruption, she insisted, there are “opportunities in this crisis and chaos.”
Rockwell echoed Elms’ concerns and expanded on them from an African perspective. He warned that Africa could be one of the biggest victims of Washington’s policy disarray. Many least developed countries (LDCs) have been hit with prohibitive US tariffs—over 40% in some cases—which undermines their development prospects.
He highlighted how access to markets, like that previously provided through the Africa Growth and Opportunity Act (AGOA), serves as a critical incentive for attracting investment. Citing the example of Lesotho, where 30,000 workers produce Levi’s jeans for the US duty-free, Rockwell noted that the end of such preferential access could be devastating. With AGOA up for renewal and little discussion in Washington, he feared the consequences of simultaneously pulling both market access and aid support. “If you have development assistance on the ground to stabilize the country,” he explained, “that provides a much more fertile environment for foreign investment.” But with both tools now under threat, the result could be “tremendous problems for Africa.”
On Journalism About Trade Agreements
Elms and Rockwell both highlighted critical gaps and opportunities in trade journalism, urging reporters to go beyond headline-grabbing political drama and dig deeper into the real-world consequences of global trade shifts. Rockwell called for more investigative reporting on Africa, particularly in light of Chinese investments in critical minerals like cobalt and lithium. He noted dissatisfaction across the continent with Chinese practices, suggesting this opens a door for the US, Europe, and Japan to engage more constructively—but stressed that reliable reporting from these regions is rare and urgently needed.
Elms expressed appreciation for the recent surge in trade-related coverage, especially stories that trace supply chains into US households or track the movement of goods, but urged journalists to go further. She suggested follow-up investigations into whether other countries are stepping in to manufacture goods once dominated by China—like strollers, for example—and what challenges they face. Elms also flagged the underreported implications of policy changes like the potential rollback of de minimis trade thresholds. While these changes are framed as helping local retailers, she argued they may drive small businesses into the arms of dominant e-commerce platforms due to higher compliance costs, potentially entrenching monopolies. She encouraged more reporting on how such shifts affect small sellers, platforms, and buyers.
Lastly, both speakers criticized the lack of in-depth journalism on reshoring. Despite political rhetoric, there’s little evidence of large-scale reshoring efforts, and Rockwell suggested this may be due to deeply embedded supply chains or a loss of manufacturing skills in countries like the US. They called for more investigative work to uncover why reshoring isn’t materializing and what it would take to make it viable.
