In a world increasingly defined by tariffs, trade wars, and shifting alliances, global commerce is undergoing a seismic transformation. The latest reports from S&P Global Ratings and major news outlets reveal a landscape where China’s trade with the developing world is booming, the United States is doubling down on tariffs, and countries like Brazil are fighting back against what they see as unfair trade practices. The ripple effects of these policies are being felt everywhere from the bustling ports of Los Angeles to the soybean fields of Brazil and the electronics factories of East Asia.
According to S&P analysts, China’s exports to the Global South—an umbrella term for much of the developing world—have doubled since 2015. The pace has only quickened since the onset of the US-China trade war during President Donald Trump’s first term. In the past five years alone, these exports have soared by 65%, tripling the rate seen in the previous five-year period. Today, China exports about US$1.6 trillion to developing countries, a figure more than 50% higher than its combined exports to the US and Western Europe, which stand at US$1 trillion. As S&P puts it, “High uncertainties under US tariffs and China’s slowdown will continue to motivate Chinese firms to head to the Global South. The result could be a new order of global commerce where South-South trade becomes the new centre of gravity and Chinese multinationals emerge as the new key players.”
This dramatic shift is not occurring in a vacuum. The US, under President Trump, has expanded its use of tariffs as a tool of economic and foreign policy. On August 18, 2025, the Commerce Department widened the reach of 50% tariffs on steel and aluminum imports, adding 407 new product codes—including consumer goods such as motorcycles and baby gear—to the list of items subject to these levies. These changes took effect immediately, even applying to goods already in transit, catching importers and logistics companies off guard, as reported by Bloomberg News.
Despite the market jitters and strained international ties, S&P Global Ratings on August 18 affirmed the US’s AA+ long-term credit rating with a stable outlook. The agency cited tariff revenues as an important factor helping to offset the fiscal blow from Trump’s recent tax and spending bill. Still, the uncertainty has led to record activity at the Port of Los Angeles, which reported handling over 1 million twenty-foot equivalent units (TEUs) in July—a record in its 117-year history. As shippers rush to front-load cargo ahead of new tariffs, the port saw an 8.5% year-on-year increase in volume, according to Bloomberg.
Meanwhile, the impact is being felt far beyond US shores. In July, the US launched a trade investigation under Section 301 of the 1974 Trade Act into Brazil’s digital trade and tariff policies. Brazil formally rejected the allegations on August 18, challenging the legitimacy of the probe and calling for dialogue. Brazil’s finance minister, Fernando Haddad, stated the country had reached an impasse with the US over tariffs, and resolution would depend on Washington’s willingness to engage. In response to the mounting pressure, Brazilian President Lula announced $5.5 billion in credits for exporters hit by the new US tariffs, as reported by Reuters.
Europe, too, finds itself caught in the crossfire. The US and EU unveiled a tariff deal in Scotland on July 27, but disputes over digital rules—particularly the EU’s Digital Services Act—have delayed a final trade statement. EU officials told Financial Times that the US is pushing for concessions, but Brussels has drawn a red line, refusing to weaken its digital regulations. As of August 18, only the 15% baseline tariff on European exports had come into effect, with other aspects of the deal still pending.
Trade tensions are also fueling inflation. The University of Michigan’s August survey found that US year-ahead inflation expectations rose to 4.9% from 4.5% in July, while long-run expectations climbed to 3.9% from 3.4%. “Overall, consumers are no longer bracing for the worst-case scenario for the economy feared in April when reciprocal tariffs were announced and then paused,” said Joanne Hsu, director of the university’s Surveys of Consumers. “However, consumers continue to expect both inflation and unemployment to deteriorate in the future.” Consumer sentiment fell for the first time in four months, dropping from 61.7 to 58.6.
The business world is scrambling to adapt. Major US retailers like Walmart, Target, Home Depot, Lowe’s, TJ Maxx, and Ross Stores are set to report earnings this week, which could offer the first real glimpse into how tariffs are squeezing their bottom lines. The Trump administration has urged retailers not to pass higher costs on to consumers, but Goldman Sachs warned that shoppers will ultimately bear the brunt of the tariff hit, as reported by Bloomberg.
Some companies are making bold moves to navigate the new landscape. GE Appliances announced plans to invest over $3 billion to move production of refrigerators, gas ranges, and water heaters from China and Mexico to five states in the US, according to AP News. Nissan’s Infiniti brand, meanwhile, unveiled its new QX65 midsize crossover SUV in California, emphasizing US production to blunt the impact of tariffs. Tiago Castro, Infiniti’s US head, said, “The customers are reacting very well, and we need to deliver the vehicle and not stop.”
Technology and supply chains are also feeling the squeeze. President Trump announced on August 15 his intention to impose tariffs on semiconductor imports that could reach 300% within two weeks. Nvidia and AMD, two of the world’s leading chipmakers, have agreed to pay 15% of their revenue from AI chip sales in China to the US government in exchange for export licenses, a move that has raised eyebrows in both Silicon Valley and Beijing, as detailed by Bloomberg News.
China, for its part, is urging local firms not to use certain US chips in government projects, further complicating the global tech supply chain. At the same time, China’s economy is showing signs of strain, with factory output and retail sales slowing and house prices falling. Yet, the country’s pivot to the Global South is cushioning some of the blow from US tariffs. As Zhou Mi of the Chinese Academy of International Trade and Economic Cooperation told Bloomberg, “This creates a climate of uncertainty that makes businesses and markets increasingly concerned about the stability and outlook for economic and trade policies.”
With the average US tariff on Chinese goods now sitting at 55%, and new levies on everything from steel to gold bars (though President Trump recently clarified, “Gold will not be Tariffed!”), the world is watching to see how this high-stakes game of economic brinkmanship will play out. As negotiations loom with Canada, Mexico, and China, and as developing nations like Brazil push back, it’s clear that the age of tariffs is reshaping the very foundations of global trade.
All told, the world’s economic order is in flux, with old alliances tested and new trade patterns emerging. Whether this new era will bring greater stability or more volatility remains to be seen—but one thing is certain: the rules of the game are changing fast, and everyone is scrambling to keep up.
