Truth about US trade chaos. How Tarrifs will settle and why. Power of global markets and megatrends greater than any President. Comment after keynote at Logistics World in Mexico

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Making sense of global trade CHAOS: MEGATRENDS will dominate future.

More powerful in medium term than global trade barriers / chaos triggered by President Trump's "Liberation Day".

More powerful than any President. (From my keynote at LogisticsWorld in Mexico). 

Countries with young populations have long term growth advantages

Exampe: Mexico like many emerging markets (except China) has young, well-educated, energetic and vibrant population which will drive economic growth for three decades.

Compare Mexico with US, Italy, Japan - all of which have "missing generations" and face massive challenges looking after ageing populations.

Same "missing generation" issue will hit China big-time compared to India, already 6th largest nation in population, again much younger population.

Market forces greater than any President or government

Here is another Megatrend: $140 trillion in shares are sold every year, while 92% of all currency trading is carried out by robots / AI taking decisions in nanoseconds, triggered by single White House Tweets or other signals.

Market forces are more powerful than any government.

And the combined wealth of the world's 3000 billionaires is greater than the GDP of every nation of the world except US or China.

Whatever US President might say today, the greatest issue for corporations is what ACTUALLY happens tomorrow, and whether that will change the following year.

When government policy appears chaotic, companies stop investing, company stocks falls, pensions are hit, personal wealth evaporates.

What's the point of moving auto assembly lines from Mexico to US, if there is a new President elected by the time it opens? In just two year's time, the US will slide into election-mode again, and in 3 years 8 months, President Trump is unlikely to be President.

Rule of Law / Constitutions / Voters stabilise nations 

A third mega trend - often overlooked in the chaos of 2025 - is the enduring strength of the US Constitution - indeed the same for other democratic states - despite a shift to elect increasingly autocratic leaders.

In the case of the US, mid term elections for Senate and House of Representatives are only 18 months away and President Trump could lose control of one or both.  

And the Presidential Campaign will be in full swing in less than 2.5 years.

US voters will be sensitive to prices - tarrifs are in truth a tax on what people want to buy from other nations.  They will also be sensitive to loss of their own personal wealth - investments, pension assets, shares in companies they work for.  

And sensitive to the "mood" of media announcements from Corporations about future fears regarding stability of economy, trading rules and so on.  Many US workers will be impacted by counter-tarries announced by other nations, resulting in lower exports.

How will tariff chaos settle?

So how will tariff chaos settle? Sensitive areas like US auto industry will be protected long term, but not enough to prevent massive challenges from pure e-vehicle companies like BYD, who will gain massive scale in China's domestic market, plus huge demand globally for ultra-low cost electric vehicles.

In many other areas, expect rapid negotiations between US and other nations which will get tarifs reduced after the US President claims victory on some premise.

Impact on Russia - Ukraine war

In meantime an "unexpected" side effect of all this is massive humiliation of Russia, useful in softening up negotiation re Ukraine.

The core message of the "theatrical" mega-tarrif announcement and events that followed is that the US is a really important market, President Trump has attention of the world, and power to upturn patterns of global trade.

Russia by comparison then feels like a feeble economy. The US did not bother with a tariff rate against Russia because Russian exports to the US are irrelevant - and always were. Russia is an economic "shrimp" compared to the US as an economic "killer whale".

A humiliating reminder to President Putin that Russia's economy (GDP) is smaller than Italy - and vulnerable if President Trump were to follow through with secondary sanctions on any nation buying Russian oil.

However,  the Tarrif War could also have a major negative impact on resolving the Russia - Ukraine conflict:

- Lack of bandwidth in White House to deal with this as well as 50+ nations all wanting urgent meetings regarding tariff negotiations

- Counter-tarrifs by EU could provoke further hostility by senior US leaders, possibly making more likely a rapid phasing out of military support for Ukraine, plus further threats to weaken engagement as the most powerful nation within NATO. 

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