The established world trade order has been hugely disrupted this year by the new tariff policies pursued by the US. This has already led to warnings of a significant hit to global GDP and suggestions that the world could see a return to protectionism.
However, the situation could also offer opportunities for countries to explore new partnerships and may highlight the importance of diversification to ensure economies are not overly exposed to disputes between individual nations.
Indeed, there have already been signs that several countries are turning to new partners and alliances in order to counter the impact of today's uncertainties. So what might we see in the coming months as governments and businesses seek to navigate 2025's challenging environment?
Japan and China set differences aside
One sign of a shift in global trade relations comes from Asia, where traditional rivals China and Japan have been working on strengthening trade ties in the wake of US tariffs. Previously, the relationship between Beijing and Tokyo has been tense due to historical and geopolitical disputes, but the nations have focused on a united response to new uncertainties.
Following talks earlier this year, the two countries - together with South Korea - agreed to speed up negotiations for a comprehensive trilateral free trade agreement (FTA), which they said would be important in creating "a predictable trade and investment environment" in the region.
There are still several challenges to overcome. Lian Degui, professor at the Trilateral Cooperation Studies Center at Shanghai International Studies University, wrote in China's Global Times newspaper that disagreements between the nations regarding export controls on semiconductors, as well as restrictive measures in the automotive and agricultural sectors, could present barriers.
However, he suggested that better communication and multilateral cooperation can help the countries "minimize disruptions caused by historical issues and interference from extra-regional powers".
Possibilities for an ASEANAUK agreement?
Elsewhere, it has been suggested that strengthening ties between the ASEAN nations, Australia and the UK could see the creation of a new multilateral trade bloc. It was suggested by Modern Diplomacy that the foundations of this have already been set by the UK's accession into the CPTPP agreement and its post-Brexit shift towards the Indo-Pacific region.
However, there is the potential for more to be done, especially since several key ASEAN members, such as Indonesia and the Philippines, remain outside CPTPP.
An ASEAN-Australia-UK alliance could offer a range of advantages, connecting the ASEAN nations' growing consumer economies with the UK's large services sector and Australia's significant resources in sectors like agriculture and mining.
"The ASEANAUK trade bloc could reduce ASEAN’s reliance on China, which dominates its trade flows, by diversifying and strengthening its economic resilience amidst global tensions," research analyst Shiwen Yap said. However, he noted that a range of regulatory challenges would have to be overcome given the differing frameworks and policies among ASEAN nations.
What steps could the EU take to forge new ties?
The EU has also sought new trade opportunities in recent months in response to US uncertainty. As well as finalizing its FTA with the Mercosur group of South American nations, it has agreed a modernization of its deal with Mexico, advanced talks with Switzerland and signed a 'reset' of its ties with the UK.
Like the UK, Brussels has also turned its attention eastwards to new partners in the Asia-Pacific region. Last month, EU trade commissioner Maroš Šefčovič visited Singapore and Japan to discuss strengthening economic ties.
New Zealand prime minister Christopher Luxon has also called for closer cooperation between the two regions in response to US trade tariffs, saying his vision is for "action to prevent restrictions on exports and efforts to ensure any retaliation is consistent with existing rules.
There have even been calls for the EU to follow the UK by seeking full membership of the CPTPP bloc. Sweden's minister for foreign trade, Benjamin Dousa, told Reuters: "If the EU and the CPTPP as trade groups link together it would create the biggest free-trade area in the whole world."