Global trade policy interventions hit a record high, and supply chains enter an era of "pan-securitization".

The global trade policy environment is undergoing a structural shift. According to the Trade Policy Activity Index jointly released by the World Trade Organization (WTO) and the International Monetary Fund (IMF), the level of global trade policy intervention at the start of 2026 has climbed to a historic high. The index covers 197 countries and regions, and records show that tariffs, import restrictions, and production subsidies are all trending upward in tandem. This change is not a short-term fluctuation, but a clear signal that the operating logic of global supply chains is undergoing a profound transformation.

I. The Instrumentalization of Trade Policy: From Efficiency-Driven to Security-First

For decades, the core logic of the global trading system was maximizing efficiency—reducing production costs through comparative advantage and the global division of labor. However, the latest trade policy data indicate that this logic is being replaced by a new "security-first" paradigm. WTO and IMF research teams point out that trade policy is increasingly being used as a means to achieve economic resilience, industrial competitiveness, and geopolitical objectives.

In early 2026, the U.S. government launched a new round of Section 301 tariff actions against 60 major trading partners, aimed at addressing forced labor in trade. The actions cover more than 99% of U.S. imports, with most tariffs ranging from 10% to 12.5%, though rates are higher for specific products and countries. This marks a further bundling of trade policy with labor rights and human rights issues, and also shows that the tariff tool has expanded from traditional industrial protection to values-driven trade governance.

II. Supply Chain Restructuring: Companies Face a "Two-Track" World

Trade tensions between the United States and Canada escalated further in July 2026. The United States, invoking a rarely used provision of the Tariff Act of 1930, imposed a 50% tariff on approximately US$20 billion worth of Canadian imports, covering wine, dairy products, cement, and sporting goods. This is the first application of the provision since it was enacted nearly a century ago. Combined with previous tariffs on steel, aluminum, and automobiles, uncertainty in North American supply chains has risen sharply.

At the same time, the U.S. government imposed import restrictions on certain Chinese-made robots and interconnected power inverters, citing national security and cybersecurity concerns. These measures, enforced by the Federal Communications Commission, are intended to protect America's artificial intelligence supply chain and critical infrastructure. It is clear that supply chain security in the technology sector has become a central battleground in great-power competition.

For multinational corporations, a "two-track world" is taking shape: technology and security-sensitive areas are tending toward decoupling, while ordinary consumer goods still maintain relatively free flows. Ford CEO Jim Farley recently told employees that Chinese companies could enter the U.S. market within 5 to 10 years, which also reflects U.S. industry expectations for the long-term competitive landscape.

III. AI Drives Trade Growth, but Momentum May Be Hard to SustainDespite a tightening trade policy environment, global merchandise trade still achieved growth in the first quarter of 2026. According to WTO data, on a seasonally adjusted basis, global merchandise trade volume increased by 1.9% quarter-on-quarter and 3.2% year-on-year. A major driver of this growth was demand for AI-related infrastructure, including semiconductors, data transmission equipment, and digital technology products.

However, WTO experts have cautioned that this growth momentum may be difficult to sustain. Persistent geopolitical tensions, trade policy uncertainty, and high energy prices could all restrain trade momentum in the coming quarters. In other words, the AI dividend, though strong, is insufficient to offset structural headwinds.

IV. The EU's Defensive Response: Establishing a Supply Chain Risk Consultation Mechanism

Facing an increasingly interventionist global trade environment, the EU is accelerating the development of its own risk management framework. According to Bloomberg, the European Commission plans to launch a business advisory group this autumn aimed at facilitating the sharing of supply chain risk information. The group had previously been delayed over the question of how to handle the confidentiality of sensitive corporate data; it is now operating on a temporary basis, advising officials on specific risks, response strategies, and "de-risking" measures.

This initiative is part of the EU's economic security strategy and also reflects the collective anxiety of major economies over supply chain vulnerability. The EU is simultaneously assessing its relationships with major trading partners, including China and the United States, covering issues such as export controls, industrial competition, and access to critical goods.

V. Regional Resilience Agreements: Cooperating to Address Supply Disruptions

At the bilateral level, Australia and Singapore have signed an agreement on economic resilience and essential supplies, strengthening cooperation on critical supply chains and trade. The agreement builds on the existing free trade agreement between the two countries and aims to enhance their capacity to withstand global supply disruptions. The emergence of such "supply chain minilateral" mechanisms indicates that countries are increasingly inclined to supplement the traditional multilateral trading system with flexible bilateral or regional arrangements.

Conclusion: Globalization Enters a Phase of "Managed Openness"

Taken together, the global trade picture in 2026 presents a striking contradiction: on the one hand, policy intervention and protectionism are rising in tandem; on the other hand, new technologies such as AI continue to drive trade growth. This contradiction is not a temporary policy shift but a turning point in the long-term trajectory of globalization.

Future global supply chains will no longer be governed by a single efficiency metric, but will instead weigh security, resilience, and predictability simultaneously. For businesses and policymakers alike, understanding how trade policy is reshaping industrial layout, logistics networks, and investment decisions is more critical than ever. Globalization has not ended, but it is entering a new phase of "managed openness" — a phase in which those who can more accurately anticipate policy movements will seize the initiative in the reconfigured global production network.