Welcome to the first Trade Secrets of 2026. Not for the first time it seems slightly beside the point to be solemnly writing about anti-dumping and rules of origin when President Donald Trump is kidnapping a leader of a sovereign nation and claiming he will seize its oil, and yet here we are. For a lot of the past few years, the trade world has been so utterly crazy that trying to do year-ahead predictions would have been a category mistake. But perhaps it’s evidence that the Trump tornado in this area has calmed somewhat that I feel it’s a sufficiently reasonable exercise to try for 2026. Charted Waters, where we look at the data behind world trade, is on one of the forgotten stories of globalisation and another hotspot Trump said he would sort out and didn’t — the Houthi control of Yemen, which has enabled the rebel group to disrupt shipping in the Red Sea.

Predictions for 2026

Will US tariffs end the year higher than they began?

No. As I said in my contribution to the FT’s end-of-year predictions, Trump’s tariff campaign has run into trouble. It has had to retreat in the face of opposition from China and it is highly unpopular, even before most of the effects have fed through to US consumer prices. If Trump has the humiliation of losing the US Supreme Court case over whether his “international emergency” duties are unconstitutional, he’s going to incur a political cost reconstructing the tariff wall and won’t be in much of a mood to create new ones, especially given upcoming midterm elections in which the Democrats will be whacking away at his economic policy. He’s already backed off new semiconductor and pharmaceutical tariffs, and if they do happen they will be limited. He will reach for other tools such as anti-circumvention actions and export controls to try to exert US control over the trading system.

Does China shift from export promotion and allow the renminbi to rise?

No. China has been promising a shift to consumer-led demand for decades but it has yet to happen — and its need to keep growing means this year won’t be the year it does. Nor will there be enough pressure from trading partners to make it happen. A lot of countries around the world are very worried about Chinese export competition, and a lot of trade defence instruments are being readied and used. But there isn’t a concerted attempt to force China to revalue the renminbi. Such efforts have failed in the past, and no one is going to join a currency posse led by Trump of “Mar-a-Lago accord” fame. Furthermore, countries are dependent on Chinese tech, in a negative way regarding rare earths and a positive way regarding the import of green tech to decarbonise their economies. More effort will go into pressuring China to shift production to the target consumer market than blocking its exports, as already seen in the EU.

Does the EU-Mercosur deal get ratified?

Yes. The agreement ran into yet another set of snags shortly before Christmas as France (of course) and Italy (less automatically) said they needed more protection for their farmers before they would agree it. Since the grown-ups in the Mercosur countries are highly unlikely to go through another process of tweaking the deal to placate European toddlers, on the face of it this looks like a serious problem. In the end, though, I suspect that the European Commission’s urgent need to chalk up some geoeconomic successes and the EU’s need for alternative export markets to the US will win out. If necessary the vote can be passed by qualified majority over French opposition, allowing President Emmanuel Macron to tell his farmers he did his best to stop it.

Does USMCA get renegotiated or trashed?

The US-Mexico-Canada deal comes up for review in July and Trump has talked about junking it if he doesn’t get his way. In reality, it will be renegotiated rather than discarded. Just as in Trump’s first term, USMCA is one of the few areas where his administration will go through legitimate channels and US Congress will be very likely to approve the resulting changes. Trump will continue to ask for Canada and Mexico to match US tariffs on China, edging towards something like a partial customs union, and will buttress those moves with rules of origin to prevent Chinese goods sneaking in via other countries. Canada and Mexico won’t like that and will fight a bureaucratic rearguard action to soften his demands as much as possible, as indeed they also did when USMCA first replaced the North American Free Trade Agreement (Nafta). But in the end they remain too dependent on the US to tell Trump to shove USMCA and look for markets elsewhere.

Does an effective anti-US alliance emerge on trade policy?

No. Sauve qui peut will continue to be the default modus operandi of all trading partners when dealing with Trump and his threats and “gunboat” deals. No government trusts others enough to join up with them, and those trading powers big enough to build a coalition, the EU and China, have chosen to do it their own way. The most that will happen in terms of international co-ordination is governments will be somewhat keen to sign trade deals with each other as insurance for being cut out of the US market, with existing agreements such as the Asia-Pacific CPTPP getting a boost in credibility and applicant countries stepping up their efforts to accede.

Will multilateralism in trade recover?

Absolutely not. I feel like I’m cheating even making a prediction about this since it’s been a no-brainer for so long. The World Trade Organization secretariat and the more constructive member countries, together with the Cameroonian hosts, will try to tee up some kind of symbolic achievement at the institution’s ministerial conference in Yaoundé in March. But the last such gathering ended in disappointment as India at the last minute decided to squelch a deal on fisheries trade. The US will continue to undermine the organisation’s dispute settlement system and India will continue to block any meaningful negotiations. China’s offer to stop claiming developing country status under some circumstances last year had no impact in creating any kind of momentum. The US circulated a paper on WTO reform just before Christmas that got some people excited. But since it proposed abandoning the “most-favoured nation” principle, it was an absolute non-starter.

Charted waters

Remember when the Houthis’ control of Yemen and attacks on shipping in the Red Sea were going to end globalisation unless the US could bomb them out of their redoubts? Well, they’re still there, the world shipping industry found ways round the disruption and, in any case, more recently they’ve eased up those attacks.

Trade links

• Karthik Sankaran argues in a piece for the Quincy Institute for Responsible Statecraft that Trump’s fossil-fuel imperialism in Venezuela ignores how much global energy markets have changed since the 1970s.

• A piece in Nikkei Asia looks at how Vietnam continues to benefit from being the connector country between China and its ultimate export markets in the US.

• Further to my prediction about China above, my FT colleagues look at why China won’t move from its export-orientated model.

• The South China Morning Post examines how competitive pressures in the Chinese electric vehicle market will drive some manufacturers to the wall.

• On the same subject, a study published by the Council on Foreign Relations says the US should compete with China on EVs rather than ceding the field.

• The FT’s Africa editor says the continent’s growth could outpace Asia’s in 2026.

Trade Secrets is edited by Harvey Nriapia