There has been a recalibration of trade after US President Donald Trump announced tariffs on countries across the world, including India, forcing them to back away from a period of trade liberalisation seen under the multilateral framework, panellists told Deepshikha Sikarwar in a discussion at the ET House in Davos.
"The signals that we got on liberation day were the beginning of a set of signals that have varied over time. We have seen significant shifts with respect to tariff policy and declarations since that day less than a year ago...hard to imagine," said Erik Petersen, global MD of AT Kearney Global Business Policy Council.
Big tectonic shifts are at work, he added.
The other panellist, Sunny Mann, global chair of Baker Mckenzie, said there has been a recalibration of trade.
"Yes, there is change, and the intensity of change is pretty fast moving at the moment," he said. "There is always a degree of disruption in the global trade order, but it just feels a little bit more intense because, I think, over the last few decades, you have got used to trade barriers coming down."
While excess of 70% of global trade is still conducted in most favoured nation terms of the World Trade Organisation, Mann said there has been a weakening in that multilateral world order. "What has emerged is a complex patchwork of bilateral trade and investment corridors. We are seeing many more FTAs emerge," he said. "India has entered into FTAs, for example, with EFTA, the UK, and now there's a focus on the EU as well. So, it is more of a recalibration of the trade order, and there are still opportunities for companies to lean into."
Petersen said there is a "weakening of the international framework for trade."
"Different pressures are at work, and the bottom line is that it's creating a set of circumstances that are generating uncertainties for companies. Many of them are in a wait-and-see posture. They are thinking about other non-tariff measures that are going into place," he said.
According to Petersen, the ongoing World Economic Forum is a "perfect case of the fusion of geopolitical and geoeconomics," which is one of the buzzwords of interest over Greenland. "So, we're seeing trade issues tied to geopolitical interests," he said. Both the panellists said there is no longer one vision of the future and a variety of new approaches are needed to be put into place to take on this new world. There are no static rules of this game due to the asymmetries, they added.
On the role of India in the fast-changing scenario, Petersen said: "The rapid ascension of India in this context is really interesting, not only because of why it's happening. You have remarkable growth rates compared to every other major economy in the world right now."
India's economy is expected to grow 7.4% in FY26. About the weaponisation of supply chains, Mann said the Indian government has played a smart game with its diversification strategy.
"What they've said fundamentally is, we are not going to pick sides, and we are going to maintain dialogue with as many different partners as possible, but we're going to diversify whom we trade with," he said.
More diversification would be seen as the world becomes more disrupted, Mann said.
"The signals that we got on liberation day were the beginning of a set of signals that have varied over time. We have seen significant shifts with respect to tariff policy and declarations since that day less than a year ago...hard to imagine," said Erik Petersen, global MD of AT Kearney Global Business Policy Council.
Big tectonic shifts are at work, he added.
The other panellist, Sunny Mann, global chair of Baker Mckenzie, said there has been a recalibration of trade.
"Yes, there is change, and the intensity of change is pretty fast moving at the moment," he said. "There is always a degree of disruption in the global trade order, but it just feels a little bit more intense because, I think, over the last few decades, you have got used to trade barriers coming down."
While excess of 70% of global trade is still conducted in most favoured nation terms of the World Trade Organisation, Mann said there has been a weakening in that multilateral world order. "What has emerged is a complex patchwork of bilateral trade and investment corridors. We are seeing many more FTAs emerge," he said. "India has entered into FTAs, for example, with EFTA, the UK, and now there's a focus on the EU as well. So, it is more of a recalibration of the trade order, and there are still opportunities for companies to lean into."
Petersen said there is a "weakening of the international framework for trade."
"Different pressures are at work, and the bottom line is that it's creating a set of circumstances that are generating uncertainties for companies. Many of them are in a wait-and-see posture. They are thinking about other non-tariff measures that are going into place," he said.
According to Petersen, the ongoing World Economic Forum is a "perfect case of the fusion of geopolitical and geoeconomics," which is one of the buzzwords of interest over Greenland. "So, we're seeing trade issues tied to geopolitical interests," he said. Both the panellists said there is no longer one vision of the future and a variety of new approaches are needed to be put into place to take on this new world. There are no static rules of this game due to the asymmetries, they added.
On the role of India in the fast-changing scenario, Petersen said: "The rapid ascension of India in this context is really interesting, not only because of why it's happening. You have remarkable growth rates compared to every other major economy in the world right now."
India's economy is expected to grow 7.4% in FY26. About the weaponisation of supply chains, Mann said the Indian government has played a smart game with its diversification strategy.
"What they've said fundamentally is, we are not going to pick sides, and we are going to maintain dialogue with as many different partners as possible, but we're going to diversify whom we trade with," he said.
More diversification would be seen as the world becomes more disrupted, Mann said.
