International trade policy in 2026 - Q1 Report
International trade policy in 2026 - Q1 Report
Global trade in 2026 continues to be shaped by legal uncertainty, geopolitical tensions and structural shifts in supply chains - and the United States is the driver.
The U.S. Supreme Court’s decision to limit the use of emergency powers for tariff imposition marks an important constitutional clarification. However, rather than signalling a change in policy direction, the Administration’s swift pivot to alternative tools – notably Section 122 tariffs and expanded Section 301 investigations – means that tariffs remain a core instrument of U.S. economic and industrial strategy.
Trade policy is increasingly being used to pursue objectives beyond market access, including reshoring manufacturing, securing supply chains and addressing economic vulnerabilities. As a result, the predictability that has traditionally underpinned international trade frameworks is giving way to a more fluid environment.
Trade policy beyond the U.S.
The U.S’s traditional trading partners are adjusting their strategies. Canada’s renewed focus on diversifying trade and investment ties beyond North America - particularly engaging with Indo-Pacific partners - reflects growing concern about over-reliance on a single market.
Similarly, the advancement of agreements like EU–Mercosur, EU-India, EU-Australia and EFTA’s expanding presence in Southeast Asia illustrates Europe and others’ efforts to broaden their partnerships and reduce their exposure to shifting U.S. policies. From critical minerals partnerships to energy and logistics disruptions linked to geopolitical developments, governments and businesses are increasingly prioritising security of supply. Environmental regulation like the EU’s deforestation framework is also reshaping trade flows and compliance expectations.
What are the implications for businesses?
These developments create a more fragmented, less predictable trading environment. Although opportunities for new partnerships remain, businesses must navigate increasingly interconnected trade, regulatory and geopolitical risks.
These dynamics are accelerating a shift toward more managed and regionally aligned supply chains. Governments are influencing diversification of sourcing and increasingly causing rerouting of trade along politically aligned corridors, often at higher cost.
In this environment, businesses shouldn’t view customs and transfer pricing as back-office tax accounting tasks. The businesses that thrive will be those that move quickly, diversify wisely and join up tax and trade decisions end to end.
Five developments to watch
The full 2026 Internation trade Policy Report covers global trading developments as well as highlighting:
- U.S. tariff changes
- EU implementation of the Turnberry Agreement with the U.S.
- Movements towards provisional Application of the EU-Mercosur Agreement
- Energy supply risks from the Middle East conflict
- China and U.S. trade talks in Paris
For full details and analysis - Download the report