As a member of the Global Trade and Innovation Policy Alliance (GTIPA), the Center for Research and Policy Making (CRPM) has contributed to the latest GTIPA report titled “How America’s Trading Partners Are Reacting to U.S. Tariffs”.
The report is based on a comprehensive questionnaire developed by the Information Technology and Innovation Foundation (ITIF), a leading U.S. think tank. GTIPA members from 17 countries provided insights on how their respective economies are responding to the evolving global trade environment shaped by recent U.S. tariff measures. Participating think tanks represent Argentina, Australia, Bangladesh, Brazil, Bulgaria, Canada, Chile, Germany, Italy, Jordan, Mexico, North Macedonia, Pakistan, Peru, Poland, and South Africa. The data was collected between May 1 and June 6, 2025.
Common Patterns Across Countries
The report identifies several common trends among the countries analyzed:
- Diplomatic over Retaliatory Approaches: Most countries—particularly smaller economies and U.S. allies—prefer to prioritize trade negotiations with the United States rather than adopting retaliatory tariffs.
- Measured Retaliation: Some EU countries, including Italy and Germany, show readiness to respond with moderate countermeasures. Canada, drawing from its previous experience with steel and aluminum tariffs under the first Trump administration, is prepared to retaliate if negotiations fail.
- Strategic Diversification: In response to trade uncertainty, many countries are pursuing two key strategies:
- Diversifying export markets to reduce dependency on the U.S.
- Implementing domestic economic policies to support vulnerable sectors and foster greater self-reliance.
Strengthening Trade Resilience
Many governments are adopting or exploring policies to enhance trade resilience by:
- Investing in local industries
- Exploring new export destinations
- Accelerating export diversification efforts
Nearly all participating countries anticipate short-term negative impacts due to a global economic slowdown triggered by the trade conflict. Nations with greater exposure to U.S. trade—such as Canada, Germany, and Mexico—expect more pronounced economic downturns.
Shifting Alliances and Economic Realignment
In response to shifting global dynamics, countries are increasingly leveraging regional and multilateral platforms to strengthen economic ties. Examples include:
- MERCOSUR–EU Free Trade Agreement
- Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
- ASEAN trade integration
Meanwhile, several countries in the Global South (e.g., Bangladesh, Brazil, Pakistan) are intensifying trade relations with China and seeking Chinese investment, especially as the United States steps back from global trade leadership. Others—such as Canada, Italy, and Germany—are adopting a more cautious stance toward China.
Broader Economic Strategies
Beyond trade, some countries are implementing broader economic resilience measures, including:
- Fiscal and monetary interventions (e.g., Australia, Poland)
- Strategic stockpiling of essential goods and resources to buffer against supply shocks (e.g., Argentina, Australia, Pakistan, Mexico)
This collaborative GTIPA report offers a snapshot of the global trade landscape amid renewed U.S. protectionism, highlighting the varied—and often innovative—ways countries are adapting to a turbulent economic environment.
