Global Trade to Slow to 0.5% in 2026 as Tariff Risks Escalate, ING Warns
An analysis from ING states that global trade has held up relatively well in 2025 despite the highest tariff rates since the 1930s, due to factors including frontloading ahead of U.S. tariffs. The report indicates that U.S. tariffs are here to stay, with a risk of escalation rather than de-escalation of trade tensions.
Read also: Global Trade Hits Record $35 Trillion as Shipping Patterns Shift Toward Regional Alliances
The U.S. administration is using tariffs as an important tool for policy goals and needs the revenues to partly fund the budget. Another reason for trade uncertainty is that the current trade truce between the U.S. and China will expire next year, potentially bringing new turbulence in the second half of 2026.
ING also notes a significant risk that U.S. trading partners will not be able or willing to deliver on investment commitments under trade agreements, which could trigger renewed tariff action. The firm expects global trade to slow down significantly, from around 2.5% in 2025 to some 0.5% in 2026.
Risky Call: Accidental Tariff Acceleration
Despite President Trump’s assertion that “tariff is the most beautiful word in the English dictionary,” the effective U.S. tariff rate turned out to be much lower than feared after his announcements. ING suggests the U.S. government has no interest in completely melting down global trade, but rather in reshaping it.
A U.S. Supreme Court ruling on some U.S. tariffs could trigger an unintended acceleration. If the court rules against the tariffs, the U.S. government may revert to more sectoral tariffs, which could do more harm to exporters and U.S. consumers, triggering a more adverse global impact.
Bold Case: The World Can’t Live Without the U.S.
ING’s bold case posits that attempts by U.S. trading partners to build new trade alliances all fail. In Europe, almost-finalised agreements like with Mercosur don’t receive approval from some member states.
The few new trade agreements Europe closes all fall short of offsetting losses in exports to the U.S., as no other trading partner has the same purchasing power. While doubts about the rule of law in the U.S. previously prevented European corporate relocation, these concerns fade, and Europe sees massive corporate emigration.
Consequently, feeling pressure to deliver on election promises to bring back manufacturing jobs, President Trump could increase tariffs for European exporters ahead of the U.S. mid-term elections. The first review of the USMCA deal next year could also bring renewed tensions with Canada and Mexico.
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