Global trade in crisis – what's next?
Nov 2025
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Across different disciplines and vantage points, leading thinkers at the UBS Center Forum converged on a shared message: global trade is not collapsing, but it is entering a more complex, politically charged, and strategically contested phase. The world economy is being rewired, yet the core structures of global integration remain intact. The question is not whether globalization will survive, but what shape it will take next.
Maura Wyler-Zerboni (Text) & Ueli Christoffel (Images)
These insights emerged when prominent economists, policymakers, and business leaders came to Zurich in 2025 at the invitation of the UBS Center. Speaking at the Forum for Economic Dialogue in the fall, they offered complementary perspectives on the forces reshaping trade and on the choices facing Switzerland, Europe, and the global economy.
Evidence-based perspectives on global trade
“72% of world trade is still conducted under WTO rules,”
noted former WTO chief economist Ralph Ossa, cautioning against overstating the crisis. The U.S. tariff hikes were historically large, he acknowledged, but their global reach is limited: the U.S. accounts for just 14 percent of world imports. Declaring the rules-based order dead, he warned, risks turning narrative into reality. His outlook: more fragmentation, more uncertainty, but no collapse of global trade.
“It was an unusual warning shot.”
With this observation, CEPR Vice-President Hélène Rey highlighted a rare market reaction: on April 2, when new U.S. tariffs were announced, investors moved out of Treasuries and the dollar depreciated, the exact opposite of its usual safe-haven behavior. Rey showed how global trade has shifted to a tripolar system anchored in the U.S., China, and the EU. Firms are already adapting, relocating production, redesigning supply chains, and passing on higher costs.
“You go to zero, and I go to 15.”
With this deliberately sharpened summary of current U.S. tariff demands, EU Ambassador João Aguiar Machado underscored how power politics is reshaping global trade. He argued that the international trading order is undergoing its most significant restructuring since the postwar period, driven by a shift away from rules toward unilateral pressure. And while most trade still runs through WTO disciplines, he cautioned that we have not yet seen the consequences of these actions, particularly if Chinese exports begin diverting into Europe.
Power, currencies, and global order
“The fate of the dollar depends on the rule of law.”
Barry Eichengreen, a world-leading expert on global monetary systems, financial crises, and economic history, traced the resilience of the U.S. dollar – from its postwar ascent to its survival after the collapse of Bretton Woods. Its dominant role has endured largely because alternatives remain limited. Yet gradual erosion is possible, he argued, driven not by macroeconomic weakness, but by political institutions and trust in the U.S. legal framework.
“It’s the ‘what’s next’ that links the trade shock to financial instability.”
Former governor of the Reserve Bank of India Raghuram G. Rajan emphasized that trade tensions interact with domestic vulnerabilities. The rules-based order has been weakening for years, he argued, not because of trade alone, but because policymakers have failed to address the distributional effects of globalization. Political polarization, not tariffs themselves, may pose a deeper threat.
Opportunities in a disrupted world
“There is not one way of seeing the same reality.”
For Paul Bulcke, Honorary Chairman of Nestlé, the turbulence of global trade underscores the importance of leadership that goes beyond technical expertise. Judgment, perspective-taking, and the ability to interpret uncertainty, he argued, are becoming essential.
“The goal was to move away from the 31% tariffs, but into the other direction.”
Rahul Sagal, CEO of the Swiss-American Chamber of Commerce, noted that according to SECO, only about 10% of Swiss exports are affected by the 39% tariffs imposed by the Trump administration. However, due to the appreciation of the Swiss franc, a Swiss company exporting to the U.S. currently faces additional costs of 50–60% compared to a U.S. competitor, a situation that is clearly unsustainable in the long run. He emphasized that Switzerland is one of the few “industrialized countries” that still truly has an industry, with 20–25% of its GDP coming from the industrial sector. His greatest concern is that, if current trends continue, Switzerland could eventually become just another average industrialized nation focused primarily on services.
Despite clear risks, several speakers highlighted opportunities. Europe could strengthen its geopolitical weight by completing the Capital Markets Union. Switzerland retains substantial advantages: strong institutions, stability, innovation capacity, and an economic model built on openness rather than protectionism.
A world in transition
Taken together, the voices that gathered in Zurich draw a coherent picture: globalization is not ending, but changing shape. Trade networks are being rewired, alliances recalibrated, and power redistributed. For Switzerland and Europe, the task is to remain open, agile, and grounded in the institutional strengths that have long supported their prosperity.
Across different disciplines and vantage points, leading thinkers at the UBS Center Forum converged on a shared message: global trade is not collapsing, but it is entering a more complex, politically charged, and strategically contested phase. The world economy is being rewired, yet the core structures of global integration remain intact. The question is not whether globalization will survive, but what shape it will take next.
Maura Wyler-Zerboni (Text) & Ueli Christoffel (Images)
These insights emerged when prominent economists, policymakers, and business leaders came to Zurich in 2025 at the invitation of the UBS Center. Speaking at the Forum for Economic Dialogue in the fall, they offered complementary perspectives on the forces reshaping trade and on the choices facing Switzerland, Europe, and the global economy.
Press
Wie lange noch bleibt der Dollar die Weltwährung? SRF Echo der Zeit vom 11.11.2025 mit Barry Eichengreen
«Die aktuelle Entwicklung erinnert an die Internetblase und an die Finanzkrise» NZZ Interview mit Raghuram Rajan vom 21.11.2025
«Wir stehen am Beginn einer neuen globalen Finanzordnung» Tages-Anzeiger Interview vom 23.11.2025 mit Hélène Rey
