The global trading system, having just weathered one of its most dramatic years in recent memory, now faces a new chapter marked by uncertainty, adaptation, and the far-reaching consequences of American protectionism. As 2025 draws to a close, the aftershocks of President Donald Trump’s aggressive tariff policies are being felt across continents, industries, and diplomatic tables, setting the stage for a turbulent 2026.
Despite the United States erecting a formidable tariff wall around the world’s largest economy, global merchandise trade proved surprisingly resilient through 2025. According to shipping industry veteran John McCown, global container volumes actually grew by 2.1% in October compared to the previous year. However, this headline figure masks deeper, more disruptive trends. The U.S. itself saw inbound container volumes contract by a striking 8%, even as imports surged into Africa, the Middle East, Latin America, and India. "World container supply chains have already begun to adapt and reconfigure trading patterns," McCown wrote in a research note on December 22, 2025. He went on to say, “To say that the annual total for 2025 will be in diametric contrast [to 2024] is an understatement.” In 2024, U.S. container imports had soared by 15.2%—a boom now reversed.
The underlying reason for this dramatic shift, according to McCown and other experts cited by Bloomberg, is the Trump administration’s aggressive use of tariffs to protect American industries. “If 2025 was the year of the tariff, then 2026 will be the year of tariff consequences,” McCown declared in a widely discussed LinkedIn post. This sentiment is echoed by Bloomberg Economics, which predicts that 2026 will be the year the global economy learns to live with American protectionism.
One of the most immediate arenas for these consequences is North America itself. The United States, Canada, and Mexico are about to embark on a review of the United States-Mexico-Canada Agreement (USMCA), the trade deal that replaced NAFTA in 2020. U.S. Trade Representative Jamieson Greer told lawmakers in December that the review would take the three nations into “new territory,” given the unprecedented provision allowing for an update after just six years. Greer noted that more than 1,500 responses were received during the public comment period, reflecting a wide array of opinions. “Many stakeholders expressed support for the USMCA and many explicitly called for the agreement to be extended,” Greer said. “At the same time, virtually all stakeholders also called for some sort of improvement to the agreement.” The challenge, of course, is that any improvement for one party could come at the expense of another, setting the stage for a tough round of negotiations among the continent’s largest trading partners.
Tensions between the U.S. and Canada are already running high. President Trump abruptly terminated trade talks with Canada in October after a series of anti-tariff advertisements featuring Ronald Reagan aired north of the border. Meanwhile, industries on all sides are struggling to cope with American import taxes, and the prospect of more contentious negotiations looms large.
Beyond North America, the world’s shipping lanes are bracing for two potential shocks in 2026. The first is the possible return of the global cargo fleet to the Red Sea route, which had been largely abandoned for two years due to Houthi attacks. With those attacks subsiding following the Gaza peace plan in October, carriers such as France’s CMA CGM and Denmark’s A.P. Moller-Maersk have begun sending some ships through the Red Sea and Suez Canal. But Lars Jensen, CEO of Vespucci Maritime, warned during a Flexport webinar that “a full return to the Red Sea and the Suez Canal shortcut between Asia and Europe will flood the market with a lot more capacity and create massive port congestion issues in Europe.”
The second potential disruption is demand-driven. If the U.S. economy accelerates in 2026 as Trump administration officials predict—spurred by an investment boom and lower interest rates—the resulting inventory restocking could overwhelm the shipping industry’s capacity, leading to backlogs reminiscent of the Covid-19 pandemic.
Trade deals forged in 2025 are also under scrutiny. The White House touts agreements with several major economies as key achievements, though most partners accepted lower tariffs only in exchange for concessions such as investment pledges or greater market access for U.S. exports. Yet these are not traditional, binding trade deals with robust enforcement provisions; notably, the truce with China lasts just one year and leaves unresolved the U.S.’s most unbalanced trading relationship. This fragility is already being tested: Indonesia, wary of U.S. demands that might limit its independence, continues to resist, with an agreement now expected in late January. China has openly complained to Malaysia and Cambodia about their U.S. deals, and even the United Kingdom faces new complications. Greer recently highlighted that contentious talks with both the European Union and India are set to spill into the new year. In a pointed social media post, Greer’s office threatened retaliation against the EU for what Washington sees as excessive regulation of American tech companies.
The looming U.S. Supreme Court decision on the legality of Trump’s so-called reciprocal tariffs is another major wild card for 2026. These broad levies, imposed on most major trading partners under the International Emergency Economic Powers Act, face a legal challenge that could upend the administration’s trade strategy. Should the Court rule against the tariffs—a scenario betting markets now assign a 75% probability—the government may be forced to consider refunding billions in tariff revenue to American importers. Kevin Hassett, director of the National Economic Council, told CBS’s Face the Nation, “It would be pretty unlikely that they’re going to call for widespread refunds, because it would be an administrative problem.” Greer, for his part, expressed confidence that “with other tools we have related to unfair trade practices, we can produce the revenues we need. It is a lot of money. It’s a big deal. The U.S. should not turn up its nose at producing even goods like pencils or dolls.”
The administration’s approach has both supporters and detractors. Proponents argue that tariffs and alternative trade remedies protect domestic industries and generate much-needed revenue. Critics, however, warn that such measures raise consumer prices and provoke retaliation from trading partners. Greer defended the Trump administration’s record, pointing to rising manufacturing investment and a shrinking bilateral deficit with China as evidence of success.
Whether 2026 brings relief or more turmoil remains an open question. Asked at the Atlantic Council whether the coming year would be quieter on the tariff front, Greer demurred: “That’s a question for President Trump.” For now, the world’s trading system stands at a crossroads, bracing for the full impact of a protectionist America and the unpredictable consequences that lie ahead.
