The global trading system faces unprecedented uncertainty and potential contraction, largely fueled by the policies of U.S. President Donald Trump, according to Gabriel Felbermayr, director of the Austrian Institute for Economic Research (WIFO). In an assessment released to the Bayern Media Group, Felbermayr warned of a looming period of stagnation or even decline in worldwide trade for the coming year.
Felbermayr argued that Trump fundamentally altered the landscape for international commerce. While some initially feared scenarios have not fully materialized, the U.S. has demonstrably distanced itself from the established, rules-based international trading framework. This withdrawal, he asserts, is actively pushing other nations towards protectionist measures, driven by the redirection of trade flows and the resulting pressure to implement retaliatory tariffs.
Despite a relatively positive performance in global trade through 2025, Felbermayr highlighted emerging signs of a slowdown in dealings with the United States. Data reveals a significant downturn in German exports to the U.S., with October 2025 figures showing a decline exceeding eight percent compared to the previous year. Simultaneously, U.S. imports from China have also experienced a notable drop. Felbermayr acknowledges that China has, thus far, managed to redirect trade flows to alternative markets, effectively cushioning the impact on global trade volumes. However, he cautioned that this resilience is unlikely to persist, predicting a period of overall stagnation or slight shrinkage in global commerce next year.
The WIFO director refrained from characterizing Trump’s approach as a complete ‘brake’ on global trade “currently”, but the emerging trends – particularly the decoupling of U.S. trade relations – present a significant challenge to the stability of the international economic order. The potential consequences extend beyond measurable trade figures, potentially impacting supply chain resilience, investment decisions and geopolitical stability on a global scale. The observed pressure towards protectionism, spurred by U.S. policy, warrants close monitoring and a reassessment of international trade cooperation frameworks.
