Trump 2.0 and rising restrictive global trade policy

Wells Fargo Research Team Wells Fargo

Summary

Over the past 15 years, trade policies implemented by countries around the world have led to economic fragmentation and deglobalization. Tariffs come to mind as the instrument disrupting trade integration the most; however, evidence suggests changes to tariff policies may have actually supported global trade cohesion, at least since the Global Financial Crisis in 2008-2009. Regardless, Trump 2.0 trade policy proposals could flip that narrative in a significant way, leading to a more deglobalized world and trade fragmentation. But while the impact on the real economy could be severe, global financial markets seem to be more comfortable digesting tariff headlines and more harmful trade policies.

Trump 2.0 & rising restrictive global trade policy

We have noted in multiple previous reports how the global economy is in a state of deglobalization. Meaning, the global economy is less interconnected today than it was 15 or so years ago. Reduced global inter-connectivity and a fragmenting global economy is arguably one of the most interesting long-term trends and seems to be a topic that is continuously unfolding. While the Global Financial Crisis of 2008-2009 (GFC) started the second era of deglobalization, the rise in trade protectionism around the world post-GFC exacerbated this deglobalization trend. The years immediately following the GFC saw a rise in protectionist trade policies; however, inward-looking trade policies picked up pace in 2016 with Brexit and the policies pursued by the first Trump administration. Protectionist trade policies gathered momentum over the course of Trump 1.0 and COVID, but also as a result of nearshoring and attempts to remove China from global supply chains, as well as military conflicts in Europe and the Middle East. According to Global Trade Alert, governments around the world responded to each of these developments by implementing more inward-looking and “harmful” trade policies (i.e., policies that reduce global trade cooperation) rather than policies that liberalize trade (i.e., more integrative global trade policies). In fact, over the past 15 years, harmful trade policy interventions have significantly outpaced interventions to liberalize trade. Since 2010, authorities around the world have imposed over 15,200 cumulative harmful trade restrictions as opposed to just over 5,600 cumulative policies designed to promote cross-border trade. Through the early months of 2025, data suggest that global trade policy is currently the most restrictive and protectionist it has been in the post-Global Financial Crisis era as harmful trade policies continue to be implemented at a more rapid pace relative to free trade types of policies.

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Wells Fargo Research Team

Wells Fargo

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