‘US tariffs leading to partnerships that once looked impossible’: Ex-diplomat warns US may lose its leverage
Washington’s renewed tariff offensive under US President Donald Trump is beginning to reshape the contours of global trade. The punitive tariff-imposition stance of the United States has prompted once-unlikely partnerships and accelerated conversations about new economic groupings that could sideline America in the medium term.
Trump’s approach of targeting both rivals and allies with heavy tariffs has been presented as an effort to redress America’s long-standing trade imbalances. In practice, it has become a blunt assertion of US economic dominance of forcing several trading partners to either accept harsher terms or face steep barriers to the American market.
But as former US diplomat Wendy Cutler noted this week, the ripple effects are producing surprising new alignments. Cutler took to LinkedIn and posted, “Recent US trade moves are leading to a series of new partnerships, resuming negotiations and concluding deals that once looked impossible, and reassessing bilateral relations that once looked off limits. If these partnerships and groupings succeed over time the US will lose important leverage as it finds itself on the outside looking in.”
Tariff pressure to collective resistance
For much of Trump’s tenure, the tariffs seemed effective. Weaker economies, heavily reliant on the US market, were forced into concessions ranging from tariff cuts to promises of new US-bound investments. Yet, in recent months, the politics have begun to shift. Leaders from India, China, Russia and Brazil have shown signs of resistance.
Smaller and medium-sized economies, once content to negotiate bilaterally with Washington, are now asking whether a collective shield is needed to avoid being picked off one by one. Many are looking to the BRICS bloc, already home to 4.5 billion people and accounting for more than 37% of global GDP by purchasing power parity, as a natural alternative.
India’s strategic dilemma
India finds itself at the center of this recalibration. Long courted by Washington as a counterbalance to China, New Delhi is now grappling with tariffs that are higher than those imposed on Beijing. Prime Minister Narendra Modi has resisted opening India’s farm markets –- which was a core US demand in the now seemingly stalled trade talks — even as pressure mounted.
At the same time, signs of pragmatic outreach to China are visible. Earlier this month, Beijing and New Delhi agreed to resume direct flights, streamline visas and boost trade during Chinese Foreign Minister Wang Yi’s visit. It is an extraordinary turnaround. India is simultaneously resisting US demands while testing the waters with a country Washington once expected India to help contain.
Brazil charts own path
Brazilian President Luiz Inacio Lula da Silva, who is facing 50% tariffs on a range of goods, has also been blunt about his strategy. Lula had said, “We will continue to sell [our products]. If the United States doesn’t want to buy [from us], we will find new partners. The world is big, and it’s eager to do business with Brazil.”
Smaller nations create FIT-P
Even outside the BRICS orbit, smaller countries are moving quickly. Singapore, the UAE and New Zealand are preparing to launch the Future of Investment and Trade Partnership (FIT-P), Financial Times reported. It is a coalition designed to uphold “rules-based” trade and encourage digital and investment cooperation. Potential members of the group reportedly range from Morocco and Rwanda to Uruguay and Norway. According to FT, the grouping is expected to formally launch in November.
While small in economic weight compared to the US, these coalitions matter symbolically. They signal a desire to preserve open trade norms at a time when the world’s largest economy is retreating from them.
Europe and Asia reinforce their own ties
Meanwhile, larger blocs are not standing idle. The EU and the 12-member Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) announced plans to deepen cooperation. Former EU trade commissioner Cecilia Malmström told FT that such initiatives were complementary to smaller efforts like FIT-P. “It shows that many countries want to trade within clear rules and transparency. This group could co-operate with EU-CPTPP and together push for plurilateral global rules,” she said.
Trump’s tariffs have unquestionably reasserted American clout in the short term but they are also knitting together an unlikely patchwork of nations. These nations are exploring ways to insulate themselves from US economic shocks.