The United States’ focus on ‘America First’ policies could result in its share of global trade falling, a report has claimed.
New research from the Boston Consulting Group (BCG) found the value of global goods trade is expected to rise faster than previously expected in the next decade, despite US President Donald Trump’s sweeping tariff announcements last year.
Yet the US’ goods trade share is under threat as a result of its protectionist approach.
The BCG’s Trade in Transition: How to Prepare for a Patchwork World Order report analysed four scenarios for the future of global trade. Under the most likely scenario, total goods trade is projected to grow by 2.5% annually – slightly faster than global GDP growth.
This would see the value of goods trade rise from US$23tn in 2024 to almost US$30tn in 2034, suggesting trade was “more resilient” than previously expected, BCG said.
It added that higher US import fees were not expected to affect growth because the nation accounted for just 16.5% of global goods imports in 2024.
At the same time, Trump’s tariffs – now affecting 61% of all US imports, compared to 13% prior to being introduced last year – and a focus on domestic production could trigger a decline in the US’ share in global goods trade, the BCG research found.
The US share of global goods trade could decline from about 12% to over 9%, BCG said. It added that this does not necessarily mean GDP growth would also weaken, as increased domestic production and consumption could offset the decline.
The consulting firm also cautioned that “the trade lanes goods travel in will be dramatically reshaped” under this scenario – also known as the “patchwork” system, characterised by four distinct “nodes” that would be the focus of trade flows.
These are the US and China, as well as the plurilateralists – nations that belong to one or more plurilateral trade agreements, including Australia, Canada, the EU, Mexico, Morocco, Singapore and the UK – and BRICS+, a group that excludes China but includes Brazil, Russia, India and South Africa.
BCG classed countries that do not belong to these groups as “rest of world”, and noted that they “will become increasingly important in the future, both as markets and suppliers of goods and services”.
Aparna Bharadwaj, leader of BCG’s global advantage practice and a co-author of the report, said: “The future of global trade won’t be defined by a single set of rules, but by a patchwork of relationships and regional priorities.
“Our modelling shows that even amid rising fragmentation, trade remains on a clear growth trajectory, and the advantage will go to those who move early to adapt and lead in this evolving landscape.”
US trade share under threat
Trade growth between the US and the non-China BRICS+ nations is projected to grow by just 1.5% annually under the ‘patchwork’ scenario, as is the growth for trade between the US and the plurilateralists. US-China trade, meanwhile, would decline by 4.5%.
By contrast, BCG expects the plurilateralists to experience “above-average trade growth in many lanes”, including a 3% compound annual growth rate for trade among themselves over the next 10 years as they “diversify away from the US and China”.
China would be expected to surpass the US as a trade partner with the Global South, with a 5.5% compound annual growth rate for trade with other BRICS+ nations.
Overall, the global free-trade system is continuing to fragment and “appears unlikely to return to its old form”, the report said.
The World Trade Organization’s (WTO) role in resolving disputes has now “weakened”, with WTO members turning to smaller coalitions, like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, instead.
There are also other upcoming events that could shift these scenarios, such as negotiations on the US-Mexico-Canada Agreement.
“The result could determine whether the US becomes more isolationist or committed to integration with its North American neighbours,” BCG said.
The three other scenarios BCG assessed include two extremes – either a trade system based on self-sufficiency as isolationism and protectionism escalate, or a reversion to rules-based trade, “where tariffs stabilise, tensions ease, and rules generally hold”.
The last scenario, and the most likely after the patchwork option, BCG said, is global division into “regional strongholds”, with nations in the Americas, Europe and Asia-Pacific trading more with one another.
Business response
To prepare for the “patchwork” scenario, BCG recommended that businesses should embed geopolitics into their strategic decisions and find ways to drive cost productivity to combat tariffs and other trade barriers.
“The art of cost resilience will therefore become a critical source of competitive advantage,” the consulting firm said.
Those who come out on top in this scenario will likely have “sophisticated” compliance operations that can minimise tariff exposure for different markets and products, while also striking the “optimal” balance between absorbing costs and passing them on to customers.
“Global trade isn’t retreating, it’s reorganising,” added Marc Gilbert, global leader of BCG’s Center for Geopolitics, and a co-author of the report.
“Leaders who embed geopolitics in capital and strategic decision-making will be best positioned to navigate the next decade of change to secure resilience as well as growth.”
Last year, UN Trade and Development – which the US recently announced it intends to leave – forecast that global trade and economic growth are set to slow down in 2026 due to geopolitical instability.
