Trade survives, but the battle for control intensifies: 3 calls for global trade
The desk asserts that global trade will showcase resilience through 2027, adapting amidst evolving geopolitical tensions and shifting priorities away from tariffs to ownership and technology. This perspective is supported by ING's view that trade has remained robust despite previous disruptions, estimating a 3% year-on-year growth in goods trade. As companies navigate these challenges, particularly in the context of US-China relations, the focus is expected to shift towards strategic investments and infrastructure. Per the full note , there are critical implications for how nations' policies on capital and technological ownership may reshape the global trade landscape.
What the desk is arguing
The desk believes that the landscape of global trade will remain resilient even as geopolitical tensions evolve, particularly with the focus shifting from tariffs to ownership and technology. Per the full note , ING forecasts a 3% annual growth in global goods trade by 2027, driven by a strong demand for AI infrastructure and technology investments, especially in Asia.
This outlook underscores the adaptability of trade amidst regulatory challenges, suggesting that companies can innovate and adjust faster than policymakers can implement restrictive measures. This perspective enhances our understanding of how trade flows are likely to evolve in a complex geopolitical climate.
Where it sits in our coverage
Currently, our consensus target for currency valuation sits at 1.075, with the following firms contributing to the landscape: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26)
Our view aligns closely with jpmorgan, emphasizing a positive outlook towards currency exchange rates bolstered by trade resilience in the coming years. Notably, our target aligns with the higher end of the prevailing estimates.
How other firms see it
Firms like jpmorgan and bofa showcase contrasting perspectives on the trajectory of trade flows and currency valuations, with jpmorgan leaning towards optimism about resilience and growth, while bofa expresses caution over potential decelerations in trade performance.
In this context, the dynamics of trade expansion are crucial, particularly as they intersect with movements in USD/EUR pricing and forecasts from key central banks. Such factors create a complex interplay for institutional traders to navigate as they monitor shifts in trade policy and economic alignment.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01ING forecasts 3% growth in global goods trade by 2027, driven by technology investment and demand in Asia.
- 02The focus of global trade dynamics is shifting from tariffs to ownership and technological control.
- 03Resilience in trade suggests companies are exceeding government limitations, adapting to geopolitical tensions.
- 04Differences in firm targets highlight divergent views on trade and currency valuations.
Market implications
Monitor the developments in USD/EUR dynamics as they are likely to reflect the anticipated shifts in trade policy and growth. The desk suggests traders keep an eye on the economic indicators emerging from central banks overseeing major currency pairs, as these will be instrumental in influencing market sentiment.
Risks to this view
A significant escalation in the EU-China trade conflict represents a major risk that could derail the anticipated growth in global trade. Additionally, unexpected changes in regulatory environments affecting foreign investments could prompt a reevaluation of trade flows and associated currency valuations.
Articles Trade survives, but the battle for control intensifies: 3 calls for global trade Published 08:53 Financial Institutions TMT Translate Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Global trade will remain resilient in 2027, but the focus will shift from tariffs to ownership, technology and investment. While not our base case, an escalation in an EU-China trade war would rank among the most significant risks to global trade Inga Fechner and Carsten Brzeski Europe is undoubtedly facing a second 'China shock' – only this time around, it's largely negative How to read our three calls for 2027 Source: ING "> Source: ING ING's base call: Trade survives politics Global goods trade continues to weather geopolitical shocks. Over the past few years, trade has proved far more resilient than global headlines suggest.
We expect that resilience to continue into 2027. Disruptions in global shipping, shifting tariff regimes and recurring geopolitical tensions have repeatedly altered trade routes without derailing trade itself. Strong demand for AI-related investment and infrastructure should continue to support trade flows, particularly across Asia, while selective US-China decoupling is likely to benefit third countries that attract production and investment.
For 2027, we expect global goods trade to remain positive, expanding about 3% year-on-year. In short, trade survives politics in 2027 because companies can still adapt faster than governments can restrict them. Our risky call: Ownership matters more than trade Tariffs were only the first step.
By 2027, the real battleground shifts to capital, technology and ownership. As companies invest behind tariff walls, governments stop merely screening new investment and begin requiring companies to restructure, separate sensitive operations or divest existing strategic assets. A foreign-owned battery plant, semiconductor facility, or data centre once supported for bringing local investment and jobs is now treated as a national-security risk.
Companies that once navigated geopolitical tensions through diversification find themselves forced to choose sides. The question is no longer who exports the most, but who controls the productive capacity on which economies depend. Trade would continue, but the corporate structures that have kept it moving would start to fracture as governments alter trade flows.
This could potentially cause global goods trade growth to stall or even contract in 2027. Our bold call: EU-China trade war The EU and China enter an outright trade conflict. Europe abandons its largely open-market approach and increasingly applies reciprocity principles to market access and investment.
Sources & References
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