It has been another wild week on the global trade front. Tariffs are whipsawing. Supply chains are scrambling. Markets are swinging wildly. And businesses everywhere are re-evaluating their next moves.
The U.S.-China trade relationship has now entered uncharted territory, with tit-for-tat tariffs hitting unprecedented levels. What began as targeted escalation is morphing into a broad and punishing economic standoff. Meanwhile, the U.S.’ 90-day tariff pause for other trading partners has only added to the confusion –— offering a narrow window for diplomacy, or perhaps just more volatility.
Amid the chaos, one thing is clear: this is no longer just about trade. The White House is reshaping the global economic order in real time, with ripple effects for global supply chains, pricing, investment, and geopolitics. And multinationals are understandably asking –—– what is the endgame here, and how do we prepare for what’s next?
1. What is the long-term strategy behind the U.S. administration’s tariff policy – and is there an endgame?
There are three consistent themes emerging in President Trump’s trade approach: the containment of China, the onshoring of manufacturing, and now –— with the recent pause on reciprocal tariffs –— pursuit of greater market access for U.S. exports. While the strategy may appear transactional at times, the through-line is a reordering of global trade relationships on terms the Trump administration believes are more favorable to U.S. economic and geopolitical interests.
2. What is the outlook for U.S.-China trade – are we headed for a protracted decoupling, or is there still room for dealmaking? And how should companies respond in the near term?
The immediate risk to U.S. companies is tariffs –— Chinese duties now make it prohibitively expensive to export most goods to China, where U.S. exports previously averaged $150 billion annually. If tensions escalate further, services could be next. The U.S. currently runs a $32 billion services surplus with China, and American brands have built substantial market share there.
For now, the White House’s posture looks more like strategic decoupling than tactical dealmaking. President Trump has called for phasing out “essential” Chinese goods broadly defined as everything from electronics to pharmaceuticals. Bipartisan momentum supports decoupling in critical sectors such as technology, aerospace, and life sciences. That said, the administration has left the door open to negotiation on targeted issues like fentanyl precursors, intellectual property, and capital flows –— suggesting the potential for tactical pauses or deals.
Beijing, for its part, is wary of engaging publicly without a clearer sense of the U.S. endgame –— and how other countries are positioning themselves around Trump’s tariff strategy. At the same time, China has so far refrained from triggering consumer boycotts, though this could change quickly if anti-U.S. sentiment hardens further.
In the short term, companies should continue to monitor developments closely and adopt a cautious, well-informed stance. Many multinationals have already pursued a “China-for-China” model –— localizing production and operations to insulate against tariffs. That remains a smart hedge, but additional risks such as regulatory scrutiny, operational barriers, and reputational backlash should now be part of the planning horizon.
Documentation is also critical: with U.S. authorities expected to ramp up enforcement against transshipped Chinese goods, companies must ensure end-to-end traceability to avoid unexpected duties or penalties.
This is not a moment for panic –— but it is one for clear-eyed planning, contingency mapping, and active government engagement on both sides of the Pacific.
3. The tariff escalation initially seemed to target Canada and Mexico, but the U.S. administration has since shifted its focus more squarely to China. Does this signal that Canada and Mexico are now in good standing – or is there a risk the political calculus could shift again and put USMCA partners back in the crosshairs?
No market is entirely in the clear. USMCA-compliant goods still enjoy tariff-free access, but tariffs on non-compliant imports, as well as on steel, aluminum, and auto parts, remain. Negotiations on metals and autos are likely to intensify, and the possibility of new tariffs –— including on copper, lumber, or pharmaceuticals –— cannot be ruled out.
Dialogue with Mexico is ongoing, and Canadian Prime Minister Mark Carney has indicated that Canada is set to ramp up comprehensive engagement immediately following its April 28 election. Positive outcomes from these dialogues could bring more predictability, but U.S. domestic triggers –— such as fentanyl enforcement, immigration flows, and even water treaty compliance –— may reopen the door to new tariffs.
4. How are other major economies – such as the EU, Japan, India and emerging markets (e.g., Vietnam) – likely to respond to the U.S. tariff escalation, and what are the implications for companies operating globally?
USTR Jamieson Greer has stated that approximately 70 countries are seeking negotiations to avoid higher tariffs. The EU has paused its retaliatory tariffs in step with the U.S. and remains open to negotiation. Japan and Korea have already opened formal channels with the Trump administration, with meetings expected shortly (indeed, a meeting between Secretary Bessent and Japan’s lead negotiator could take place as early as next week). In Southeast Asia, which has been targeted for some of the highest reciprocal tariff rates, there are serious concerns about the potentially devastating impact on economic growth in countries such as Vietnam, Cambodia, and Thailand that will receive very high tariff rates and have become increasingly dependent on exports. These three countries, as well as India, have benefitted from supply chain shifts out of China, but high U.S. tariffs could call the sustainability of this trend into question. ASEAN countries have signaled that they do not view retaliation as a viable strategy and are instead seeking negotiated settlements with the United States.
For multinationals, the takeaway is clear: political engagement and commercial adaptability in these markets will be essential as they calibrate their positioning in response to U.S. moves.
5. How do we communicate clearly and credibly with policymakers, investors, customers, and other important stakeholders in this volatile environment?
Be grounded in facts by enhancing your intelligence gathering and monitoring. Acknowledge the uncertainty, stay anchored to your long-term strategy, and scenario-plan rigorously. Keep stakeholders informed –— not just about what you know, but about what you are actively watching. Activate a rapid-response process to enable nimble, coordinated decision-making, and lean on trusted expert advisors to sense-check assumptions, strengthen your understanding of the evolving dynamics, and help you navigate effectively.
Targeted and thorough engagement with policymakers across jurisdictions –— particularly where supply chains span borders –— has never been more important given the volatility and the wide range of potential outcomes. Trade policy expertise matters just as much as access. Above all, communicate with discipline and realism: avoid both false reassurance and overreaction. This is a moment that calls for strategic clarity, steady leadership, and credible messaging.
