A New World Trade Architecture with Three Regimes Takes Shape in 2026

Hung Q. Tran

No 2611, Policy briefs on Economic Trends and Policies from Policy Center for the New South

Abstract: World trade was more resilient than expected during 2025. Its growth probably resulted from the way the rest of the world reacted to the U.S. tariffs. Other factors also had an impact, including moves by exporters to the U.S. in the first half of 2025 to get ahead of the tariffs, and the boom in global tech capital expenditures driven by investment in artificial intelligence (AI). The trade pattern observed in 2025 and early 2026 could point to a new architecture of world trade. There is no longer a coherent global system based on consensus decision making and the cardinal principle of non-discrimination. Rather, global trade is increasingly fracturing into three overlapping but distinct regimes, driven by different dynamics and ways of doing business. Most countries besides the U.S. and China (n-2) will likely coalesce around major regional trade agreements (RTAs). The other two regimes are driven more and more by the geopolitical priorities of the two superpowers, an arrangement under which individual trade partners are in disadvantaged positions relative to them. This emerging world trade architecture of three regimes appears to be a second-best solution to the trade havoc in 2025; and less efficient than an open rules-based trade system. Each regime will evolve in terms of how it functions, and will affect economic activities in response to problems inherent in its configuration.

Date: 2026-04
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