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HSBC's head of global trade solutions, Vivek Ramachandran says in an era of Donald Trump's tariffs, the world is becoming more interconnected than ever with an increase in bilateral trade deals and new trade corridors emerging.
He joined The Business while visiting Australia, saying the new deals may be a consequence of US tariffs and trade wars or it may be a natural evolution of demand in other markets growing faster than anticipated.
"India just signed a trade agreement with the UK and the same with the EU is underway. The GCC is signing new trade deals," he says.
His assessment comes as the United States and Canada ramp up their tariff war, with Canada retaliating against recent US duties and bans on a variety of Canadian products including alcoholic spirits, dairy goods and motorbikes.
When asked whether middle powers are beginning to form alliances as Canada's prime minister Mark Carney has called for, Mr Ramachandran says so far there's no sign of anything other than bilateral trade deals.
He suggests that could be because the US consumer makes up around 30-35 per cent of global consumption, making it difficult for any company or country to ignore trade opportunities with the US.
As far as Australia's current trading environment is concerned, he says Australia is doing a good job at balancing the needs and demands of trade with two competing superpowers - China and the US.
And he says the two biggest forces reshaping global trade, the AI investment boom and services, have nothing to do with the US military action against Iran, and resulting impact on energy supply.
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