Chaos in trade: Portes warns the world is on edge

“The US - China relationship is highly volatile … the degree of uncertainty is huge,” says London Business School’s Professor Richard Portes - and that volatility is now cracking the global economy.

As the Trump administration slaps new tariffs on Chinese wood, furniture, and ships, and Beijing retaliates with tighter controls on rare earths and battery components, countries far beyond Washington and Beijing are finding themselves caught in the firing line.

European automakers reeling from export limits on essential minerals, shipping companies screwed by US levies on Chinese-built vessels, and steelmakers in post-Brexit Britain hit by spillover E.U. tariffs: all are collateral damage in a global trade fight.

Nations now face pressure to choose sides. Mexico, urged by Washington, floated a 50 per cent tariff on Chinese cars; India responded to US tariff pressures by leaning into China. Meanwhile, Europe launched a punishing 50 per cent steel tariff aimed at China, but ended up striking at the heart of Britain’s exporting industry.

Portes encapsulates the new reality: Beijing advances with method and consistency, while the US swings unpredictably, and every shock ripple has the power to reverberate across supply chains, markets, and alliances.

In short: global trade is no longer driven just by economics, it’s being shaped by capricious politics, and in that tug-of-war, uncertainty is the real contagion.

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