Members of President Donald Trump’s Cabinet, including Energy Secretary Chris Wright, Commerce Secretary Howard Lutnick, Chief of Staff Susie Wiles, Treasury Secretary Scott Bessent and Secretary of State Marco Rubio, listen to Trump’s speech at the World Economic Forum (WEF) at the Davos Congress Center January 21, 2026 in Davos, Switzerland.
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The United States appears increasingly isolated when it comes to its global geopolitical and trade relationships as its allies reassess their ties to the world’s largest economy and consider going it alone.
“preliminary agreement“with Canada and rapprochement with the United Kingdomas well as the European Union’s agreements with India And South American countries.
These agreements and negotiations come after a year of US President Donald Trump’s “America First” trade and foreign policy during his second term, which saw the White House hit friend and foe alike with punitive trade tariffs, and even territorial threatswhile asserting its economic and geopolitical domination.
But this strategy could backfire, especially as America’s friends and partners seek to diversify their trade policies, largely to protect themselves from Trump’s unpredictability.
“Given what is happening with the United States and its foreign policy, as explained in the recently released report National Security Strategy … THE ‘medium powers“have to find their own agency and find different approaches,” Damian Ma, director of Carnegie China, a research center based in East Asia, told CNBC on Thursday.

“Countries are going to align on the basis of particular, map-specific interests, rather than on an overall values-based alignment,” he said, noting that while it was not a return to a divided Cold War mentality between opposing power blocs, it was rather a “recalibration” of national interests.
“No one knows where this recalibration and this new balance will end, but we see countries finally starting to act. The UK and Canada will not be the only ones,” he said, predicting a “flood of countries recalibrating their approach” to superpowers like China and the United States.
Diplomacy, without Trump
This recalibration has certainly accelerated of late with a flurry of diplomatic and trade deals struck since the new year, none of which involve the United States or President Trump.
China has been particularly busy, with Canadian Prime Minister Mark Carney, Irish Prime Minister Michael Martin, Finnish Prime Minister Petteri Orpo and Starmer visiting Beijing this month.
Canadian Prime Minister Mark Carney shakes hands with Chinese President Xi Jinping at the Great Hall of the People in Beijing, China, Friday, January 16, 2026.
Sean Kilpatrick | Via Reuters
China and Canada agreed to reduce trade barriers in early January, prompting a furious response of Trump, while British Prime Minister Keir Starmer was in Beijing restore links with President Xi Jinping, with both sides agreeing to reduce barriers to trade and travel.
The EU has also been very busy, make progress in its trade agreement with Mercosur, as well as last week’s signing of a long-awaited free trade agreement with India.
The meetings came after Trump’s tirade against his allies during his speech at the World Economic Forum in Davos, Switzerland, in which he insulted and criticized various leadersincluding French President Emmanuel Macron and Carney.

Jimena Blanco, chief analyst at risk intelligence firm Verisk Maplecroft, told CNBC there has been a measurable deterioration in how the United States communicates with its allies.
“Our data measuring verbal tensions between countries shows a deterioration in U.S. relations with some key allies over the last year,” she told CNBC on Thursday.
“The largest spikes were with Canada, Denmark, Belgium, Japan, Ireland, New Zealand and France, reflecting the impact of tense public exchanges between U.S. officials and their allied counterparts.”
But Blanco noted that U.S. allies have tended to respond to Washington’s policy changes by diversifying their economic exposure, rather than reversing their integration into the global trading system.
“The EU, Canada, Japan, Australia and the UK cannot afford to disengage from the United States, but are instead expanding trade with large emerging markets as well as with each other,” Blanco added, with emerging markets being the “big winners” from this diversification.
Rocky area
Viewing this period of difficult relations with the United States as a difficult time rather than grounds for divorce, analysts believe that the United States’ allies have no choice but to try to keep the United States on their side, while exploring other avenues of trade and cooperation.
“Europe is too dependent on the United States, not only for its security, but also technologically and economically, to prefer a life of divorce today,” Ivan Krastev, president of the Center for Liberal Strategies in Sofia, Bulgaria, said in a Goldman Sachs report earlier this week.
“For Europe, while there is much talk about finding new allies, aligning with others will not be a quick or easy process,” he noted, adding: “Instead, Europe will work to show the United States that Europe matters.”

Joseph Parkes, senior analyst at Verisk Maplecroft, agreed that the United States was ultimately too big to be isolated: “It’s just too big from a technology, trade, currency and security perspective,” he told CNBC on Thursday.
Nevertheless, key allies will work to rebalance their global relations in long-term strategic areas, he said.
“The nature of globalization will change. Trade fragmentation will create new and different groupings of countries seeking to increase their economic resilience,” he told CNBC on Thursday, with “geopolitical agility” increasingly important for businesses to navigate a more uncertain landscape.
“Recent volatility has accelerated the shift from just-in-time to just-in-case to strengthen supply chains,” he noted, with companies turning to nearshoring and friendshoring to source materials from trusted allies.
In the meantime, Parkes said, governments would seek to “expand trade agreements to enhance strategic flexibility and reduce market and supply chain dependence on any one country”.




