The Aftermath of the 2025 U.S. Tariffs: How Countries Are Adapting to an Uncertain Global Trade System

The Aftermath of the 2025 U.S. Tariffs: How Countries Are Adapting to an Uncertain Global Trade System

President Trump decided to upend the global trade system in early April 2025 with many, often unclear objectives-to reshore manufacturing to the United States, rebalance imports and exports, or retaliate against certain policies that are unfavorable to U.S. companies. In that context, the U.S. administration imposed unilateral tariffs, with a base rate of 10 percent, on nearly all countries worldwide as part of the so-called "Liberation Day" reciprocal tariffs. Despite the accuracy of the U.S. government's assessment of the problem or the effectiveness of these tariffs, the most durable effect is the major shift they've induced in the global trade system.

Despite the accuracy of the U.S. government's assessment of the problem or the effectiveness of these tariffs, the most durable effect is the major shift they've induced in the global trade system.

Early economic forecasts after the "Liberation Day" announcement predicted an escalation of tariffs as countries retaliated against the United States, which could eventually lead to a deceleration of the global economy. A year later, neither country has retaliated directly, nor has the global economy entered into recession. In contrast, there has been a significant increase in trade negotiations among economies of different sizes to reduce their dependence on both China and the United States.

The United States, on the other hand, has used tariffs as leverage in bilateral trade negotiations to lower behind-the-border trade barriers. This has delivered uneven success. On the one hand, U.S. trade negotiators have often been able to incorporate provisions that traditionally have been outside trade agreements, such as prohibiting trade partners from imposing digital service taxes or from signing trade agreements with third countries considered non-market economies (such as China). However, since these trade deals are non-binding, they often are not fully implemented, as is the case with South Korea. Furthermore, the unilateral tariffs imposed by the Trump administration often disregard prior trade agreements and other U.S. trade commitments, undermining the feasibility of long-term trade partnerships.

In this context, 30 members of the GTIPA from 25 countries have come together to analyze how their economies and policy landscape have shifted a year after the so-called "Liberation Day" tariffs. The Information Technology and Innovation Foundation (ITIF), based in the United States, prepared a questionnaire with the following questions:

1. Looking back at the forecasts and dominant narratives in your country's policy and expert community following "Liberation Day," has the trade war evolved as anticipated? Where have expectations (in terms of impact, scope, etc.) diverged from reality? What has been better and what has been worse than expected?
2. How have your country's economic policy priorities shifted since the start of the trade war? For instance, have protectionist measures, industrial policy, or digital sovereignty agendas gained new momentum? If so, how?
3. How have trade policy priorities changed since the start of the trade war? Have efforts to diversify trade partnerships accelerated as a result? Please give concrete examples of new negotiations, agreements, or strategic pivots.
4. What are the sharpest disagreements among your country's policymakers and thought leaders about how to respond to the ongoing trade war?
5. How have perceptions of the United States and China shifted among your country's policymakers, business elites, and general public since the escalation of tariffs? Are those groups aligned or diverging in their views?

The countries covered in this report are: Argentina, Austria, Brazil, Bulgaria, Canada, Chile, the Dominican Republic, Ecuador, Germany, Ghana, Greece, Hungary, India, Italy, Japan, North Macedonia, Pakistan, Peru, Poland, Singapore, Spain, Sweden, Taiwan, the United States, and Vietnam.

Read the full report.