In the latest episode of “Talking Trade,” Alex Wolf of JP Morgan Private Bank says global supply chains are adapting to persistent shocks.

Wolf, the bank’s global head of macro and fixed income strategies, discusses the ripple effects of shifting trade policies and armed conflicts. He notes the new normal for international trade is characterized by frequent “shocks,” pointing to U.S. tariff changes, Russia’s invasion of Ukraine and the war in Iran.

“We’ve seen more stress on global supply chains than we have in a very long time,” Wolf said. “So on the negative side, you almost have a persistent state of uncertainty and … you could even say trade policy almost looks like, the goal of it is to be uncertain and opaque and keep companies guessing.”

But at the same time, “global trade has held up” better than initially expected through this period of uncertainty, according to Wolf.

“If you go back to April last year, and you had a lot of projections and forecasts showing a cratering in global trade, certainly that hasn’t come true,” he said. “We’re seeing still pretty robust demand, so companies have been able to adapt, supply chains have been able to adapt.”

Wolf also shares insights on tariff-related cost increases being absorbed by the economy and how that’s changed over time, as well as how price increases differ between goods and service sectors.

The discussion also explores the shifting U.S. trade relationship with China, as the United States’ trade deficit with the rival nation has declined due to lower imports from China. Still, China’s trade surplus has “continued to balloon,” reaching $1.2 trillion for 2025.

“They’re sending less to the U.S., because the U.S. is buying less, but they’re flooding the rest of the world with goods,” he said. “So they’re finding other markets … that is increasing pressure on the rest of the world that’s seeing a flood of cheap Chinese goods.”

Talking Trade is hosted by E.M Wasylik Associates Managing Director Ken Wasylik and M.E. Dey & Co. President and Managing Director Sandi Siegel and sponsored by the Dairy Farmers of Wisconsin, Carroll University and Michael Best Strategies.