The global economy is caught in the crossfire of an escalating trade war and policy shifts driven by the US administration. While the world largely dismissed provocative statements such as annexing Canada or Greenland as rhetorical stunts, the Trump administration’s trade wars and tariff policies have far-reaching consequences. They have introduced severe volatility into global markets and undermined the foundations of trade.

The lack of a clear international response to the remarks about Canada or Greenland is puzzling. Is the world hesitating due to fear, complacency or a lack of options? Regardless, the stakes are monumental, and the economic and political costs are becoming impossible to ignore.

One explanation for America’s trade aggression is that it is using tariffs to pressure countries into negotiating resolutions to long-standing trade imbalances. This may seem a clever tactic to protect American industries and secure better trade agreements – several countries have rushed to negotiate with Washington.