World trade is rudderless

New élan for old ideals

Donald Trump has fundamentally upset world trade in six months by unleashing a unilaterally imposed trade war. Like a number of other world leaders, he is driven by nostalgia but the past: Make America Great Again! Compare that to Xi Jinping’s goal to make China the most powerful country on earth by 2049, celebrating the centenary of the Chinese Communist Party’s reign. Or with Vladimir Putin’s goal of restoring Russia to its former glory. The big difference between China on the one hand and Russia and the US on the other is that the latter two countries are busy implementing their plans to achieve the opposite. And that China seems to be well on its way to achieving its goal.

Trade tariffs as an American weapon

Take Trump. His main weapon is to sharply increase trade tariffs. It is very difficult to measure the level of the rates precisely. It was preceded by unfathomable calculations in which no economist could discover any logic. The tariffs were mainly intended to limit taxes (for the rich) in the US, and to reduce the national debt. In addition, Trump felt that the US was being scammed by every country in the world. The EU was even created for this purpose, and China was dismissed as the chief swindler. ‘Deeper, darkest China’ is Trump’s new China label (according to The Economist, 13 September ’25).

The tariff calculations were supposed to provoke negotiations between all the countries involved and the US, resulting in ‘deals’. For the European Union, this deal consisted of import duties of 15 percent that the US imposed on goods originating from the EU. But this import tariff did not apply to steel and aluminum, which were subject to a 50 percent tariff. Because the US imports quite a bit of steel and aluminum from Europe – especially from Tata from IJmuiden – the total tariffs are about 20 percent. But probably more, because there is also an exception for some strategic minerals, pharmaceuticals, wood products, energy and energy products and certain electronic goods. And if the EU is going to crack down on Trump’s tech friends – leaders of companies like Google, Meta or Apple – for abuse of market power, the tariffs could just go up further.

Counterproductive measures

Despite his tech friends, Trump is mainly concerned with protecting the old industry, such as the steel industry. He has a romantic idea of the power of the US in his head, as in the 1950s when the US realized almost 50 percent of the world’s production of steel, now reduced to just under 5 percent. China has taken over the role of key producer of steel in the world, with a world market share of even more than 50 percent in 2024 and a production of about one billion tons of steel, of which 118 million tons were exported, according to the OECD Steel Outlook 2025. Increasing steel exports from China and sharply declining exports from the US and other Western countries provoked global trade measures, aimed at dumping and state subsidy from China. The high tariffs that Trump applies on steel imports will mean, among other things, higher costs for American cars: the symbolic product from the 1950s. Ford and General Motors are already feeling the pain.

China is the big culprit for Trump. Shortly after ‘Liberation Day’, the moment Trump announced his tariffs, he imposed 100 percent trade tariffs on China. This was quickly felt in China: it led to the cancellation of orders and there were even ships that turned around at sea. The renegotiations led to much lower tariffs, but still 30 percent higher than before Trump’s term started. The fluctuation in tariffs results in ‘frontloading’: exporting quickly to the US before tariffs start to rise again. This frontloading has led to peak formation in seaports – congestion, as far as Rotterdam.

China is looking for and finding other trading partners

The trade war has brought about a shift in recent months, with China’s exports to the US falling by a quarter, but China exporting much more to other countries: Chinese exports to the EU increased by about 12% (The Economist, 13 September ’25). According to market analyst Alphaliner, the container capacity between China and the US (Transpacific) is about 572 thousand containers per week. This means roughly 100 thousand fewer Chinese containers to the US every week. 3 billion dollars in value evaporates every week. 504 thousand containers are shipped from the Far East to Europe every week; 12 percent more Chinese exports mean 60 thousand more containers to Europe every week. Rotterdam has a market share of 17% in European container throughput, but is mainly specialised in Chinese cargo. Roughly half of the container throughput can be related to China. That means one large container ship extra every week. There is therefore a good chance that Rotterdam’s container throughput will increase more than expected in 2025.

The trade war is reinforcing structural growth patterns. China is shifting growth from the US and Europe to emerging non-Western growth markets, such as Turkey, South Africa and India. Surrounding countries such as Vietnam and Thailand are also benefiting, thanks to investments by Chinese companies in these countries. In addition, China has started a small revival of investments in the Belt and Road Initiative, especially in Africa. It is therefore not surprising that China’s trade with African countries has increased sharply in the past year, with Nigeria even by more than 50 percent.

New coalitions

This structural growth pattern is increasingly driven by geopolitical motives. The voting behaviour of countries in the United Nations Assembly is an important indicator of growth in world trade. Trade is increasing mainly between countries with the same voting behaviour. Trade between China, Russia and India on the one hand and trade between European countries and Japan on the other. Since Russia’s invasion of Ukraine, it has become clear that trade between countries with the same voting behaviour is growing more than between countries with different voting behaviour. Trade between China and India is expected to grow much faster than trade between the US and China, or between the EU and China. The main attendees at the summit in Tianjin organized by China at the end of August this year were telling: in addition to host Xi Jinping, Putin and Modi.

It is also significant that the US voted with Russia at the United Nations meeting last February. Does this mean that the US will also defect in trade and become part of the aforementioned trio? No: it is only an illustration of the absolute rudderlessness that currently prevails in the White House.