{"id":24292,"date":"2026-01-23T17:02:55","date_gmt":"2026-01-23T17:02:55","guid":{"rendered":"https:\/\/www.rbc.com\/en\/?post_type=rbc_tl&p=24292\/25-numbers-that-defined-a-turbulent-year"},"modified":"2026-01-26T20:43:52","modified_gmt":"2026-01-26T20:43:52","slug":"trade-zone-who-will-dominate-in-this-new-age","status":"publish","type":"rbc_tl","link":"https:\/\/www.rbc.com\/en\/thought-leadership\/the-trade-zone\/trade-zone-who-will-dominate-in-this-new-age\/","title":{"rendered":"Trade Zone: Who will dominate in this new age? \u00a0"},"content":{"rendered":"\n
\n
\n

How the math is changing<\/h2>\n\n\n\n

To judge by Davos\u2019s main promenade, globalization is alive and well. Yes, the U.S. took over a church and shop to celebrate America First. But there were far more storefronts promoting Brazil, Indonesia, the Philippines and Nigeria. India wrapped an entire hotel on the promenade, where thousands schlepped every morning from their crash pads to the Congress Centre, and back at night from dinners and nightcaps.<\/p>\n\n\n\n

Is this a false spring, just like the mild week in Davos? Or the beginning of what Christine Lagarde called \u201cPlan B\u201d and a more diversified global economy?<\/p>\n\n\n\n

The European Central Bank president told the closing session of the World Economic Forum that she \u201cis not on the same page\u201d as Mark Carney\u2019s view of a global rupture\u2014but does see an important diversification of trade underway.<\/p>\n\n\n\n

According to the WEF\u2019s own research, close to half of global growth over the next five years (2025-30) will come from Asia, with China accounting for 23% and India another 15%, while the U.S. will produce 11%. Combined, the G7 will account for only 18.5% of growth. <\/p>\n\n\n\n

If it feels like a new age of diversification, one should never forget the gravitational pull of the two economic superpowers, which over the past decade (and longer) have consumed much of the world\u2019s capital and trade. Case in point: China now accounts for about 40% of published studies on drug research, while Europe\u2019s share has dropped from 20% to 12%. Guess where most of the world\u2019s drugs will come from in the 2030s.<\/p>\n\n\n\n

With so much in flux, who will dominate the world’s future trade zones? I came away from Davos thinking three forces will help shape the answer:<\/p>\n\n\n\n

1. Balance-sheet strength.<\/strong> We may be on the verge of some heavy government (and perhaps private sector) borrowing to underwrite all that\u2019s needed for diversification\u2014from new supply chains to infrastructure. Points to the U.S. for owning the world\u2019s reserve currency, but a range of middle powers\u2014Germany and Canada, among them\u2014can borrow plenty on their own.<\/p>\n\n\n\n

2. Artificial Intelligence.<\/strong> It\u2019s sucking up much of the world\u2019s private capital, and will determine a lot of trade outcomes as it (along with robotics) transforms production. Yes, the U.S. and China dominate, but if AI becomes available to all, like the Internet, advantage will go to those with energy to power all those learning algorithms and the entrepreneurial brains to put the results to work. The eight biggest U.S. tech companies have $18 trillion of equity value to leverage\u2014and a lot more domestic energy than China or Europe.<\/p>\n\n\n\n

3<\/strong>. Demographics.<\/strong> It\u2019s the sleeper trend, as the West (and Far East) tumble over demographic cliffs. Even in an age of AI, trade still relies on humans to help make and ship things and humans to buy those things. Africa\u2019s population is on course to hit 2.5 billion by 2050, when it will be home to 25% of the world\u2019s working age population.\u00a0<\/p>\n\n\n\n

Some shrewd advice I heard was for companies to think country, supplier and currency\u2014and have an option for each. Call it a matrix of Plan Bs. Or what Carney termed \u201cvariable geometry.\u201d <\/p>\n\n\n\n

It\u2019s the new math.<\/p>\n\n\n\n

\u2014 John Stackhouse<\/strong><\/p>\n<\/div>\n<\/section>\n\n\n\n

\n
\n

The week that was <\/h2>\n\n\n\n

Bank of Canada Q4 survey <\/a>shows Canadian businesses continue to be negatively impacted by trade tensions, but some are increasing non-U.S. exports<\/strong><\/p>\n\n\n\n