Why It Matters: The US has imposed tariffs on allies and adversaries alike since Trump’s “Liberation Day” in 2025, but the response has mostly been bilateral — individual countries negotiating with Washington or retaliating on their own. This initiative is different as it would be the first coordinated, multilateral trading architecture designed to function without the United States.
The foundation already partially exists. The EU has free trade agreements with a majority of CPTPP members, including Japan, Canada, the UK, and New Zealand. What’s missing is aligned rules of origin — which determine a product’s economic nationality — that would let a car part manufactured in Vietnam, assembled in Japan, and shipped to Germany move through that chain under low tariffs without being treated as a foreign product at each border.
Bridging that gap requires a country with a foot in both blocs, and Canada is the only major economy that belongs to both the CPTPP and has a comprehensive trade deal with the EU (CETA). Ottawa also has its own motivations. Canada and Mexico have separately deepened bilateral trade ties in response to US tariffs, and a Senate Foreign Relations Committee report found China rapidly filling the diplomatic and economic vacuum left by American retrenchment.
The CPTPP itself exists in its current form because the US withdrew from the original Trans-Pacific Partnership in 2017 during Trump’s first term. The remaining 11 countries went ahead and built the trade architecture without Washington. That same bloc is now being used as the foundation for a larger alliance that routes around American tariffs.
The WTO projects global trade will slow sharply in 2026, with North America facing the steepest drop in exports. If nearly 40 countries align their supply chains under lower tariffs while US tariffs remain elevated, American manufacturers risk being priced out of markets they currently compete in. A German automaker could source parts tariff-free from Japan, Vietnam, and Mexico — all CPTPP members — but face tariffs on components from US suppliers, shifting where companies choose to invest and build.
If the goal of Trump’s tariffs is to bring manufacturing back to the US, this alliance creates incentives for companies to do the opposite — build supply chains that exclude America to avoid tariff complexity. The pattern then becomes self-reinforcing. As allies build alternative systems, the US becomes less essential to global commerce, and rejoining those systems becomes harder.
Notably, China and India are absent. China’s application to join the CPTPP, filed in 2021, has stalled amid opposition from key members including Japan, Australia, and Canada. That’s because this is a “middle powers” coalition — countries hedging against both US unpredictability and Chinese dominance. Whether China responds by pushing harder to enter these frameworks or by accelerating its own competing systems like Belt and Road and RCEP will shape which version of the global trading order takes hold.
Sources: Politico (1), Politico (2)