New trading blocs have been developing even without Trump

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The door to the President Donald Trump's rolling threats wanders around the American markets, allies and strict opponents alike. However, it should be noted that many transformations in the chains of trade and global supply that are taking place today were ongoing for some time and have no great relationship with my president. What's more, big trends are not necessarily what you think they are.

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Take, for example, the idea of ​​approaching. This certainly happens in North America, where the most strict trade relationship between the United States, Mexico and Canada over the past few years has reduced dependence on China (this of course raises the issue of Trump's desire to disrupt something good). But at the global level, the average geographical distance has already increased over the past decade, by about 10 kilometers annually, according to a new research from the MGI International Institute. The average distance in which the dollar travels from trade is now about 5,200 km.

This is in a large part of it because “friends care” is not necessarily locally. The United States has turned the offer to Mexico, yes, but also to Vietnam. Europe has moved away from Russian energy and towards the United States – At least now. Central powers such as Brazil and India and members of the Association of Southeast Asian Countries (ASEAN) find new alliances around the world. Despite the focus of many governments on limiting carbon load, which would argue in shorter supply chains (since transportation and logistical services are the second largest source of greenhouse gases after China itself), global trade is flowing as much as it was at all.

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However, there are separate commercial blocks that develop, but on the basis of political geographic, not geographical. Last May, the International Monetary Fund study found that there are three emerging political commercial blocs. First, there was one inclined in the United States and includes the United States, Europe, Canada, Australia and New Zealand. Second, a bloc with Chinese tendencies including Russia, Belarus, Syria and Eritrea. Finally, there was a third bloc filled by countries such as India, the ASEAN and other states in the “global south” that is not full of vibrant or neutral in its relations with the United States and/or China.

According to The scope of the conquest of Ukraine in 2022.

This is much lower than the fragmentation of trade that was seen during the Cold War, but it is more important, because the trade of global commodities at that time was 16 percent of GDP, while it is now 45 percent. Also, the Deputy Director of the First Administrative Committee, Jetta Jobina, noticed, the countries within the commercial blocs were integrating during the Cold War, while it might turn inward now. It is clear that this is true for the United States, which threatens definitions to the same countries that have become the closest economist over the past seven years.

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But to understand what is really changing in any specific country, you have to dig in making nuances according to the industry. Looking, for example, the sharp increase in US imports of transport equipment from Mexico. You may think this is related to import less than China, but in reality it comes to a decrease in trade with Canada. Likewise, while the US -Chinese bilateral trade in the United States has decreased, the value of the American import that depends on China did not decrease much. This is partly due to the fact that the products that arise in China are shipped to third countries before sending them to the United States as they have always been, allocating the reality of global trade is a difficult work.

How do companies adapt to this new world? Instead of choosing one block, most of them began to turn into a different model that builds additional costs for working in the three. They are also looking for ways to reduce geopolitical risks in the development of the product. For example, Unilever NV allocates less markets, and instead depends on the standard specifications of the industry, so that it can quickly transfer products from one market to another with changing the political environment.

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Many companies also use Amnesty International to predict the place of new trade disorders and automating the most complex supply chain chain business plans. For example, the French company Schneider Electric has developed the “Tower Control Tower” program looking through the entire multi -layer supplier network and re -clarifying requests immediately to different parts of the network if a specific company or country can fill it.

While Trump's tariff and their counter -employees will definitely have an impact on the form of trade in the next few years – Many international companies are already accelerating to fall into a queue and put more productive capabilities in the United States – There are larger trends that will continue to play for a long time after the disappearance of the current management.

For example, China recently announced proposals to accelerate its technology separation plans, which were launched in 2015, before Trump was elected. The Boston Consulting Group report expected that bilateral trade between the West and China will sign $ 221 billion by 2033, a decrease of 1.2 percent. I have always thought that the world gives us a lot of credit for what is already happening in world trade. The model turns, with or without Trump.

© 2025 The Financial Times Ltd

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