The last few days have been a rollercoaster for the world trade sector. US president Donald Trump's announcements of tariffs against key trading partners - and the threat of more to come - has shaken stock markets, rattled politicians and led to huge uncertainty among importers and exporters.
What's more, the administration has signalled these are likely to be merely the opening moves in efforts that will place the threat of trade sanctions at the heart of the US' foreign policy for the coming years. So what should traders be doing to prepare for uncertain times ahead?
Tariffs on Canada and Mexico on, then off again
The most dramatic moves involved the blanket 25 percent tariffs imposed by Mr Trump on Canada and Mexico - the US' largest trading partners. It is estimated that these would impact almost a third of US imports, with key categories including energy, food and automobiles among the most significantly affected.
In response, Canada announced its own tariffs on imports from the US. Meanwhile, several states in the country have looked to cancel US investments or turn to alternative sources of goods.
However, just hours before they were due to come into effect, the news arrived that they would be suspended for now after talks between the country's leaders. Both Mexican president Claudia Sheinbaum and Canadian prime minister Justin Trudeau made pledges to reinforce the border with the US in return for a 30-day delay in the tariffs.
There remains huge uncertainty about whether the postponement will last. Mr Trump may demand more concessions from his partners to stave off tariffs in the coming months.
From January to November 2024, Mexico imported $467 billion worth of goods into the US, while Canada shipped $377 billion. If implemented, it's anticipated that prices in the US could rise for a range of goods, from gasoline and lumber to fruit and vegetables.
Will China's retaliation spark a new trade war?
While the tariffs on Canada and Mexico remain in a state of limbo for now, levies on China have come into effect. The US imposed a ten percent tariff across the board, with no exceptions for low-value goods, such as toys and fashion items. Indeed, the US Postal Service immediately announced it would stop handling packages from China while the details are worked out - highlighting how quickly decisions have been taken.
Unsurprisingly, this has provoked a response from Beijing, with retaliatory tariffs on US imports. These include duties of ten percent on US coal and liquefied natural gas and a 15 percent levy on crude oil. Tariffs of ten percent will also apply to imports of agricultural machinery and some vehicles such as pick-up trucks.
China has also filed a complaint with the World Trade Organization against the tariffs, with the country's finance ministry stating: “The US' unilateral imposition of tariffs seriously violates the rules of the World Trade Organization ... It is not only unhelpful in solving its own problems, but also damages the normal economic and trade cooperation between China and the US".
Other measures from Beijing include the addition of a range of rare-earth minerals to its export control lists and an antitrust investigation into Google.
The uncertain future facing traders
Between them, Canada, Mexico and China account for 40 percent of the US' trade, totalling more than $2 trillion a year. However, there are few signs the Trump administration is set to back down. The president has already indicated similar tariffs are incoming aimed at the EU. Elsewhere, the brief imposition of duties on imports from Colombia in response to a dispute about the deportation of migrants illustrates how the administration is prepared to use tariffs as a weapon in order to put pressure on overseas governments.
While many firms have already spent the last couple of months stockpiling goods in the US in order to get ahead of anticipated tariffs, this is only a short-term solution. If the situation remains unresolved for months or even years to come, it's likely that companies will face growing costs that will have to be passed on to consumers if they are unable to rework supply chains or manufacturing processes in order to avoid tariffed goods.
In such times of uncertainty, being able to operate flexibly and identify any potential areas where incentives remain is essential. It will also be vital to have up-to-date compliance solutions in an environment where rules are changing quickly. For example, it is important to be able to immediately identify new products that are subject to duties or any partner that has been added to sanctions lists. This ensures companies can remain on the right side of the law and avoid any potential penalties.