By Micah Jonah, January 30, 2026
Countries across the world are increasingly finding ways to reduce their exposure to United States trade risks, as fresh tariff threats and protectionist policies under President Donald Trump reshape global commerce.
While no major economy is seeking a complete break from the US, which remains the world’s most lucrative market, governments and businesses are quietly redrawing trade routes to reduce overdependence. Analysts describe the trend not as decoupling, but as deliberate risk hedging.
In recent weeks, a surge of bilateral and regional trade agreements has highlighted this shift. The European Union has finalised a long delayed trade pact with South American Mercosur countries and concluded a new deal with India, moves widely seen as efforts to cushion the impact of possible US tariffs.
Experts say trade is one of the few areas where middle powers still have room to maneuver quickly. According to the Tony Blair Institute for Global Change, Trump’s aggressive trade posture has accelerated decisions that had stalled for years, particularly within the EU.
Despite the costs involved in restructuring supply chains and forging partnerships with countries of differing values, economists note that the economic impact remains manageable. A recent Reuters poll of economists forecasts global economic growth of about three percent this year, unchanged despite trade disruptions.
Businesses are also acting ahead of governments. Industry groups in Europe have welcomed new trade openings as a way to offset higher US tariffs, while German investments in China reached a four year high last year as firms strengthened local supply chains in response to uncertainty in US trade policy.
World Trade Organization Director General, Ngozi Okonjo Iweala said the trend could strengthen global resilience by spreading production and investment more evenly across regions. She noted that diversification creates jobs, reduces vulnerability to shocks from any single market.
However, analysts caution that there are limits to how far countries can go. China’s weak domestic demand means it cannot replace the US market in the near term, while Washington could also respond aggressively to countries it perceives as drifting away from its economic orbit.
For now, observers say most countries see diversification as a safer option than open confrontation with the United States, marking a gradual but significant shift in the global trade order.
