The Trade Brief:Same system, new headaches
April reminded us that the global trading system is running on a lot of crossed fingers.🤞
Pop culturally? The month was thriving.
From Bieberchella, to the new Devil Wears Prada sequel, to a Hannah Montana reunion episode, to Drake announcing a new album…it felt like a brief glimmer of light from the heydays of the early 2000s in these gray and gloomy times.
And then reality logged back in and it felt more like the 1970s.
Rising food prices, jet fuel costs climbing, messy geopolitics, countries flirting with gas shortages, and the Strait of Hormuz opening and closing more times than the fridge in your house.
But hey, the weather is getting better. It’s the small wins.
Here’s the brief recap of April:
- Stress- testing supply chains
- Tariff season now featuring refunds
- USMCA: it’s complicated
- Trade deals…shaky
- The AI boom is booming
TRADE IS INCREASING. ANXIETY IS TOO
So, it turns out that growth hasn’t disappeared; it just became a little more fragile and expensive.
The April 2026 UN trade update says:
- Global trade grew by $2.5 trillion in 2025, that’s an increase of about 7.5%.
The geography of growth is shifting. East Asia and Africa led the gains, and South–South trade rose ~9% (politely put: the West is no longer calling all the shots) and “connector economies” like Cambodia, Egypt, Vietnam and Indonesia are helping to stabilize and keep trade flowing amid the geopolitical drama.
What’s driving this growth?
- AI, semiconductors, Information and Communications Technologies, green tech and digitally linked manufacturing.
What’s not?
Energy, Autos and U.S.-China trade (which is down $170 billion).
Looking to the rest of 2026: trade is still growing, globalization isn’t dead but the vibes have shifted. Higher costs, more tariffs, and ongoing geopolitical tension mean this year will be less “global trade boom” and more “global trade gloom…with obstacles and constant anxiety.”
USMCA: SIGH, IT’S COMPLICATED
Brb, updating the Facebook status to “it’s complicated” again.
Canada is heading into the USMCA renewal saying: Let’s just preserve the deal as is. No need to make substantial changes.
The U.S. is arguing otherwise, with some claiming the deal is flawed and needs fixing.
But Prime Minister Mark Carney is not having it, saying that Washington doesn’t get to dictate the terms of the agreement. In addition, PM Carney refreshed the government’s Canada-U.S. advisory council with some heavy C-suite hitters from industries most affected by tariffs like steel, auto, forestry, along with energy, mining, transport, agriculture and finance.
And on a surprising note…
A bipartisan group of more than 40+ senators is urging the USTR to preserve USMCA because it’s been a big win for many sectors (like agriculture) and led to economic stability and North American competitiveness. Any changes might actually disrupt supply chains (more than they are being disrupted already).
Stay tuned for the next relationship status change.
TARIFF SZN CONTINUES…
The tariff refund arc has begun.
After the U.S. Supreme Court deemed tariffs imposed through the International Emergency Economic Powers Act (IEEPA) illegal, the Trump administration plans to refund around $166 billion in tariffs collected under IEPPA that were not supposed to be collected.
Businesses can now apply for repayment -plus interest- but it just might take a while (stated goal is to start cutting cheques by May 11th) and is only limited to importers, not the average consumer.
The catch?
- Refunds can take months
- More than 330,000 importers can apply
- Still a chance of new tariffs
The refund process is known as CAPE short for “Consolidated Administration and Processing of Entries.”
Catchy.
If you thought tariffs, like capris, were out of season, think again.
- 100% tariffs will now be put on patented drugs entering the U.S. unless Big Pharma cuts deals with Washington.
- To replace the Supreme Court’s decision on the IEPPA tariffs, new tariffs are in the making. The Administration is launching new Section 301 trade investigations, paving the way for another round of duties to replace the $166 billion in revenue they have to return.
- The two investigations:
- Forced labour case: targets 60 economies and almost all U.S. imports.
- Overproduction case: targets 16 economies covering 70% of imports.
- All of which could justify new tariffs if the countries involved are deemed to have engaged in “unfair” practices.
- The two investigations:
- The EU is shielding its steel industry to protect domestic producers from global oversupply.
- What does that mean?
- It’s cutting duty-free quotas almost in half and slapping 50% tariffs on anything above the limit.
- Why?
- To protect its industry, tighten controls and use steel as more of a strategic asset than a commodity.
- What does that mean?
EU: TRADE DEALS GONE WRONG?
The EU is adopting a more “Made in EU” stance by passing a new Industrial Accelerator Act (IAA).
- IAA is meant to shield European industries from cheaper imports and rules on foreign investments in sectors like EVs, batteries, nuclear power etc.
- Putting a focus on EU-based manufacturing
And China’s not so thrilled about it.
Beijing is pushing back, arguing the plan discriminates against Chinese companies and that countermeasures could happen, raising the risk of a fresh set of trade tensions.
Canada is also doing a little shopping in the EU aisle 🛒:
As part of its push to diversify and look beyond the U.S., Canada wants access to the “Made in EU” industrial framework.
A reciprocal deal pushed by Industry Minister Melanie Joly ensures that Canada and the EU are put on the same page giving businesses on both sides of the Atlantic a fair shot at each other’s industrial programs, especially in strategic sectors.
U.K.-U.S. shaky relations:
President Donald Trump is warning that the U.S.-U.K. deal signed in 2025 could be shredded after Prime Minister Keir Starmer refused to join the U.S. in the Iran war.
[FYI: This deal was kind of an economic win for PM Starmer as it offered relief on UK autos, steel, and aluminum.]
But the PM is not backing down and refuses to join the war.
Maybe some tea with the King will help set things straight – that not all friends need to sip from the same cup of opinion.
a little more tea ☕ perhaps…?
The European Union’s top trade official stepped down after publicly disagreeing with the Turnberry agreement (the agreement with the U.S. to provide tariff relief) as it was not “WTO” compliant. And now France is insisting on a little more protection with this deal.
On a more positive note, trade deals that aren’t on the rocks🤝:
EU + U.S.: A new (MOU) non-binding agreement was signed to coordinate on critical minerals to diversify trade and reduce reliance on China.
Canada + Mercosur: After 8 years of talks, Brazil shares that the long-awaited agreement is finally moving and could be solidified by the end of the year.
MOVE OVER OIL, AI IS IN THE MIX NOW
German and Canadian AI companies team up and merge under the Canadian Cohere brand to create a sovereign AI that reduces reliance on U.S. tech giants.
Why is this significant?
- For Canadian industry, this signals a deepening opportunity to co-develop and deploy AI solutions within a shared Canada-EU digital sovereignty framework.
- Less dependence on U.S.- dominated platforms.
- Governments are actively supporting alternatives for sensitive data and public-sector use.
The U.S., on the other hand, is selling AI as its newest export product.
The Department of Commerce is building an AI starter pack consisting of tools, chips, cloud services, and data infrastructure to sell abroad.
The big picture: get more countries to use American AI systems rather than relying on China’s AI infrastructure. AKA: lock in U.S. influence across the AI supply chain.
The AI global race is only getting more interesting so here’s a fun fact: AI-linked products are now driving half of global trade growth.
WHAT TO WATCH OUT FOR IN MAY?
- Mexico’s Secretary of Economia Marcelo Ebrard will lead a trade mission to Canada May 6-8.
- President Trump is set to visit China on May 14 and 15.
- India’s Minister of Commerce Piyush Goyal will lead a trade mission to Canada late May.
- Mexico and U.S. to start ‘formal talks’ on USMCA week of May 25th.
IN CONCLUSION
So soak up the sun, breathe in the fresh warm (ish) air, and appreciate the small joys like a patio opening because global trade is heading into summer with what seems like zero chill.
Here are a few recommended readings:
