Global chaos and global trade – the new world disorder and the ensuing economic carnage

News reports originally stated that President Trump was linking the Greenland threat to the Nobel Peace Prize snub, which is awarded via the Norwegian Nobel Committee, a five‑member committee appointed by the Parliament of Norway. However, it appeared President Trump was satisfied when Venezuelan opposition leader Maria Corina Machado handed over her award to him recently at the White House.

I personally believe his infatuation with Greenland has nothing to do with the Nobel Peace Prize. Those of us who are paying close attention around the globe have seen what geopolitical chaos this type of threat, and President Trump’s accompanying harsh rhetoric at Davos (January 2026) can do to trade in multiple layers at once, as the effects are far more structurally deep than most people realise. Of course, the effects of direct military conflict run much deeper with an actual invasion of another country. As we enter another year with global trade uncertainty, let’s explore both chaos and invasion and what it does to trade.

On any given morning so far in 2026, around the globe, one could easily surmise that chaos rules, and, as result, the world of trade is on fire. The global landscape is filled with trade barriers, tariffs, sanctions, and export controls, from microchips and dairy to lumber, steel, and aluminium. We have seen where geopolitical disputes often escalate into trade wars, where countries impose tariffs or targeted restrictions on each other’s goods, but an actual invasion – that’s on a totally different level regarding how it affects trade and global economies.

I first shared my perspective in an article I wrote in 2022 with Russia’s invasion of Ukraine. (https://www.braumillerlaw.com/incursion-world-trade-part-2-how-to-commit-economic-suicide-for-your-country-2022/) I was so engaged with what was taking place with war and trade that I ended up writing several articles on the subject, but never thought for a minute I would be looking at the US as potentially being the invader of a sovereign nation, much less one that is a NATO member. But at the beginning of 2026, NATO countries like France, Germany and Spain were putting boots on the ground in Greenland in preparation for a possible US invasion. It’s insanity on a global scale, and China and Russia are feeling emboldened. President Trump then proclaimed in Davos, Switzerland that the US would not use military force to acquire Greenland. Tariffs were once again the club to be used towards the US getting what the president wanted, and in this case, and in my humble opinion, it isn’t directly national security at stake, but rare earth minerals, since the US was always permitted to have military bases in Greenland. I recently wrote an article on that subject as well:https://www.braumillerlaw.com/rare-earth-minerals-part-2-enter-greenlands-global-significance/

I digress of course, so let’s get back to the threat of war causing major disruptions in global trade. In worst case scenarios, invading another country can be the catalyst for the demise of one’s own economy. Russia is a prime example, as it has now exhausted the majority of its resources, and its people are, even at the risk of being arrested, starting to put their anger on display in the streets of several cities. This takes courage given the extreme crackdowns by Kremlin enforcers. At issue is the Kremlin’s ongoing war, which is sucking resources out of the state’s accounts tasked with providing basic human needs.

Russia’s war in Ukraine has reshaped global trade more profoundly than any conflict since the end of the Cold War. It has caused energy realignment, supply chain disruption, sanctions-driven fragmentation, and long-term structural shifts in how countries and companies view trade partnerships. The conflict has redirected trade routes, increased shipping times, and raised transportation and insurance costs. Goods take longer to reach destinations due to rerouting around unsafe regions, as businesses face rising costs and unpredictable supply chains. At this juncture in the war, 4 years in, it’s notable that now oligarchs are being robbed of their fortunes, which is a true sign of the Kremlin’s desperation. Russia’s “shadow fleet” – a clandestine network of hundreds of vessels operated by Russia to evade sanctions – has also been exposed. The US seizing Venezuelan President Nicolás Maduro and Venezuelan oil have just added to the Russian war machine fiasco.

Quite frankly, Russia is on the verge of economic collapse, as 40% of all federal expenditures go to defence and national security. Defence and security spending surpassed 8% of Russia’s GDP at the end of 2025, while marketplace shelves stood empty. Russia’s behemoth coal industry, one of its major export sectors faces absolute failure, as 74% of Russian coal companies were unprofitable by late 2025. Twenty-three coal companies have shut down, with 50 more near bankruptcy. Losses reached between RUB 225–263 billion in 2025. Energy giants like Rosneft and Gazprom are losing huge sums of money as Gazprom alone recorded a RUB 170.3 billion loss over nine months. This is extraordinary for a company that has for decades funded the Russian state.

It’s notable, with the exit of over 1,000 companies from Russia over four years of war, that Citi has finally completed its exit from Russia. Citigroup had been trying to leave Russia since 2021, and the final step is now complete. Citi was the financial bridge for Russia to the global market. The company sold its remaining Russian subsidiary AO Citibank to Renaissance Capital as the bank took a USD 1.2 billion pre-tax loss tied to the exit, mostly from currency translation losses accumulated over years. This sale marks the end of a nearly four-year effort to unwind operations after the Ukraine invasion. In 2025, Citi still had USD 13.5 billion in exposure tied to Russia, reflecting the scale of its corporate relationships.

Worth a mention as well, Russian Railways (RZD) – the backbone of the Russian economy – is “on track for bankruptcy” due to war-related disruptions, falling cargo volumes, and massive debt. This railway system employs 700,000 people, making it the largest commercial employer. Freight volumes have fallen to record lows, with a sweeping decline across 20 of 24 major industries, and, as 20% of the fleet are idle, around 300,000 rail wagons clogging tracks and yards. In all major sectors, inclusive of mining, much of the Russian working class has been unpaid for months, which no government with zero funds in support can survive. It’s quite evident that Putin’s days are numbered, and that is why he is lashing out once again, trying to punish Ukraine and the civilian population. Military installations and infrastructure have very little to do with where missiles are being guided. The entire “Special Operation” never has, and never will, make any sense to the democracies of the world, so the pressure campaign will continue.

Countries that have imposed the broadest trade bans and export controls on the Kremlin are from the G7, including Australia, Switzerland, Japan, and members of the EU. The Atlantic Council’s Russia Sanctions Database confirms that these jurisdictions have imposed the most extensive restrictions on Russian trade. The countries and regions that have effectively halted most trade with Russia include: the United States, United Kingdom, Canada, Japan, Australia, Switzerland, and the European Union. Restrictions include bans on Russian oil, coal, steel, and gold, and the exporting of advanced technology, machinery, chips, and aviation parts, as well as shipping and airspace bans that block transport routes.

Financial sanctions make payments and logistics nearly impossible, and the BRICS de-dollarisation doesn’t favour the rouble. Financial devastation aside, the true end to the war will come from internal causes, like the Russian people turning protest into a revolt, due to the fact that they have far less in their bank accounts, and on the dinner table, than they did before the “Special Operation” in Ukraine. China has been their lifeline, but even that friendship with “no limits” has recently come into question.

This does raise another question: Is China paying close attention? What about the ramifications of China potentially invading Taiwan? This of course has become more of a plausible reality since the US threatened to invade Greenland. I can’t believe I just typed the last five words of the previous sentence and I’m glad it’s officially off the table. Quite frankly, a Chinese invasion of Taiwan would trigger the single largest trade shock of the 21st century. Global maritime trade would be severely disrupted, as the Taiwan Strait is one of the world’s busiest shipping corridors. Over one fifth of global maritime trade – about USD 2.45 trillion in goods – passes through the strait, and China alone relies on the strait for USD 1.4 trillion of its own imports and exports. Over half of the voyages through the strait are Chinese domestic shipping routes that would come to a halt, as an invasion would shut down or militarise this corridor, instantly disrupting energy shipments, manufacturing inputs, intra-China coastal logistics, and global container flows. This would be a systemic shock, not a merely a regional one, as the semiconductor supply chain collapses.

Taiwan produces the world’s most advanced chips and accounts for 92% of advanced semiconductor manufacturing via the Taiwan Semiconductor Manufacturing Company (TSMC) which alone makes over 75% of all AI chips used by Apple, Nvidia, Google, and others. This would be the primary reason for a Chinese invasion, not reunification, just as the US and Greenland is not about national security but rare earth minerals, which, I get it, one could tie indirectly to national security.

If semiconductor trade is blocked, global electronics production halts, AI infrastructure stalls, automotive manufacturing collapses, and cloud computing and data centre expansion freezes. Amazon, Google, Microsoft, Oracle, and even China’s own Alibaba would lose billions overnight. And this is just a fraction of the losses, as Bloomberg estimates up to USD 10 trillion in global economic losses in the first year after a potential invasion of Taiwan. This is larger than the 2008 financial crisis and Covid 19 lockdown years combined.

China depends on the Taiwan Strait for distribution of oil, coal, natural gas, ores and metals used in manufacturing, so a disruption in trade flows would cause global oil and LNG price spikes, shortages of critical metals, and cascading inflation across manufacturing sectors. The mandatory sanctions for an invasion would likely include export controls on Chinese tech, embargoes on Chinese goods, asset freezes, and restrictions on shipping and finance. China’s export-driven economy would be hit hard as exports are 20% of China’s GDP. If a company wasn’t already considering exiting China, this would be the catalyst to relocate manufacturing to India, Vietnam, Thailand, Malaysia, Mexico, or Eastern Europe.

What about Venezuela? A US invasion of Venezuela has somewhat already taken place as the US is apparently running the country from the White House. The US military operation in Venezuela has not produced a classic “trade shock” across the global economy, but it has dramatically affected oil flows, shipping behaviour, sanctions risk, and the trade positions of specific countries. The effects are concentrated, not systemic, but they are still significant, especially to both the Kremlin and Beijing. The kidnapping/arrest of President Maduro does not appear to have been motivated by a possible regime change, since the same regime is still “kind of” in power; it looks to have been more of an oil grab, based on what the US felt it was owed, and what the oil offered in future revenue.

This future revenue is in question as Exxon/Mobile’s CEO Darren Woods has called Venezuela “uninvestable”. This takes into consideration the fact that the company is still owed roughly USD 2 billion from its previous partnership with the Venezuelan government, but this fact never found its way into the negotiation. I will say, though, kudos to the Trump Administration as it did recently manage to sell USD 500 million of the oil, but the buyer is a secret. Interesting. The proceeds are being placed in US-controlled accounts, including one in Qatar. Multiple reports confirm that US attacks and enforcement actions have sharply disrupted Venezuela’s oil exports. US seizures of Venezuelan oil cargoes and a blockade of tankers have cut exports by about half from late 2024 levels.

After the military operation, tanker loading at major ports has been largely stalled, with vessels leaving empty or rerouting. The most direct trade effect is that Venezuela’s oil exports have temporarily collapsed. This means Venezuela can produce oil but cannot move it, which is a classic sanctions-driven trade choke. Venezuela holds 18% of global oil reserves – more than Saudi Arabia or the US itself. This means the trade impact is not just about disruption, but future control of supply. This was deemed necessary by many, as the Venezuelan government was inept at keeping the oil flowing because of corruption and allowing the delivery infrastructure to deteriorate. Daily oil production had dropped from a peak of 3.4 million barrels a day to roughly 850,000 today.

Where were China and Russia during this decline? Of note, India’s trade with Venezuela is also disrupted, but the Trump Administration doesn’t care because India was buying cheap oil from Russia and was considered to be indirectly supporting Russia’s war in Ukraine. India is one of the few countries where the trade impact in this case is clearly disruptive, as imports from Venezuela have fallen to negligible levels due to US sanctions. Peak flow to India was 441,000 barrels a day back in 2015. However, the US operation could unlock USD 1 billion in long pending dues for ONGC Videsh and other Indian firms. If sanctions are lifted, India could diversify away from Russian crude and increase Venezuelan purchases. Imagine that. There is a profound impact on China, Russia, Iran, and Cuba. These countries condemned the US action and face a loss of preferential access to Venezuelan oil (especially China), increased geopolitical pressure, and reduced leverage in Latin America. The trade effect here is strategic, not immediate, as their influence over Venezuelan resources weakens significantly.

Let’s turn now to US involvement in Iran where sanctions, tariff threats, and financial pressure have reshaped Iran’s trade patterns more than almost any other external factor. The US has weaponised trade pressure against Iran. The most recent and consequential action is the US threat to impose a 25% tariff on any country that continues trading with Iran. This is not a sanction on Iran itself, but instead a secondary tariff designed to punish other countries for doing business with Iran. This dramatically raises the cost of trading with Iran for China, India, Turkey, UAE, Germany, and Russia as these are Iran’s largest trading partners, and all are directly exposed to US retaliation. Iran’s oil exports are the primary target as fuel is Iran’s largest export by value. China alone buys more than 80% of Iran’s shipped oil. US pressure has reduced Iran’s pool of oil buyers, forced Iran to rely on a “shadow fleet” of tankers to evade sanctions, and pushed more oil sales into opaque, discounted channels. This reduces Iran’s revenue and increases global oil market uncertainty. This tariff forces many countries to choose between access to the American market and continued trade with Tehran.

For many economies – especially India, Turkey, and the EU – the US market is far more valuable, so the pressure is effective. China is the most exposed since it is Iran’s largest trading partner, with USD 37 billion in total bilateral trade in 2022 (World Bank estimate) that has now dropped to around USD 8 billion in 2025. A 25% US tariff on China-US trade would be economically painful, so Beijing must weigh cheap Iranian oil vs. access to the US market. This is exactly the leverage the US intends to create. India’s trade with Iran is modest but strategically important. India’s bilateral trade with Iran reached USD 1.34 billion in the first 10 months of 2025. In the bigger picture, the US involvement equates to global trade fragmentation. US actions would accelerate a broader trend as countries split into “US-aligned” vs. “Iran/China-aligned” trade blocs. Also, more trade would move through informal or shadow channels as global supply chains become more politicised.

What about the potential US invasion of Greenland? Is that still a risk? As previously mentioned in my opening, NO, according to President Trump while at Davos to negotiate with a hostile crowd by initially calling Denmark ungrateful, and the EU stupid. Let’s still take a look at NATO country vs. NATO countries for grins, and just because it’s one of the dumbest things imaginable on a global scale. Look at the now-cancelled 10% tariffs that were to be slapped on EU countries on 01February 2026, with the threat of 25% more on 01 June if the US was not awarded control of Greenland. Cooler heads have prevailed, and we apparently now have a deal that “gets us everything we need”. But the damage is already done with former allies Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland, and the United Kingdom.

In the grand scheme of building a “Golden Dome” which must include Greenland, and knowing that this multi-country arrangement stands an outside chance of failing at any point, let’s go down the rabbit hole anyway and point out that, once again, the US Congress was weak and failed to block President Trump’s mandate to invade. After all, he has been known to change his mind and turn on a dime, as they say.

Hypothetically speaking now, and as a reminder of severe consequences, an invasion of Greenland would have triggered one of the most severe trade ruptures between the United States and Europe in modern history. US-EU trade would be thrown into crisis – if it isn’t already in many cases, as tariff retaliation is currently in discussion. France’s finance minister warned that a US attempt to seize Greenland, a sovereign part of Denmark and therefore part of the EU, would severely damage economic ties between Washington and Brussels. Top analysts agree that the EU could respond with tariffs and/or sanctions, and the situation could escalate into a full-blown trade war between the US and Europe.

Denmark-US trade would of course collapse since Greenland is part of the Kingdom of Denmark, and Denmark would rightly treat an invasion as an attack on its sovereignty, triggering EU solidarity mechanisms to activate. NATO cooperation would be thrown into absolute doubt regarding its purpose for existence, which the US President questioned in Davos by stating that NATO hadn’t done enough for the US. A NATO fracture would freeze or severely restrict US-Denmark trade flows. Speaking of a freeze, Arctic shipping routes would become both politicised and militarised. Analysts note that the US wants Greenland partly to control emerging Arctic shipping lanes and keep rivals like China and Russia out. My article about this issue can be found here: https://www.braumillerlaw.com/coming-soon-a-new-polar-icebreaker-competition-in-the-arctic-region-for-trade-route-supremacy/

This now shelved, insane invasion idea would militarise the Arctic, and force shipping companies to reroute or pay higher insurance. It would also trigger counter moves by Russia and China, and increase volatility in Arctic resource and logistics markets. If you read my article on Greenland’s global significance, you’d know that Greenland contains 36–42 million metric tonnes of rare earth minerals. So, if the US acquired Greenland, even via a sale, it would gain control of a major non-Chinese, rare earth source, which is key to advanced chip manufacturing. China, which dominates global rare earth processing, would retaliate economically, and the EU, given our current situation, would lose access to a potential future supply it considers strategic. See my article on that topic here: https://www.braumillerlaw.com/rare-earth-minerals-and-chinas-global-dominance/

Global mineral markets would become much more fragmented and politicised than they currently are. This would reshape supply chains for EVs, wind turbines, electronics, and defence. Markets despise uncertainty, and this would be a geopolitical shock unlike anything in the Arctic since the Cold War. US tariff policy would continue to escalate the conflict as many companies would face survival mode of operation, deploying whatever tariff mitigation strategies were available to them. This could be a replay of the US-China trade war peak at 125%–150% tariffs, but with European allies. A NATO crisis is a trade crisis –security architecture and trade architecture are tightly linked; break one, and the other follows.

President Trump is currently directly calling out NATO members for lack of support of the US over the years, and is berating Europe in general. He stated that the US is the only country capable of defending Greenland. Obviously, NATO members will agree to differ. This posturing does not bode well for the future of EU-US trade relations, which have been put on hold indefinitely.

Moving right along with a scorched earth approach, what if the US invades Mexico to go after the cartels? President Sheinbaum has already warned the Trump Administration that this would be totally unacceptable. At this time, yes, President Trump is threatening “boots on the ground” to go after the cartels. President Sheinbaum recently offered up 37 cartel members to the US as an olive branch, which most likely will not be nearly enough to appease the White House even though Mexico has sent the US 92 cartel members in the past year. Apparently, these members were the worst of the worst from the various cartels, making them somewhat more valuable.

Without a doubt, a US invasion of Mexico to get to the cartels would trigger the most severe North American trade shock in modern history, far beyond anything seen in tariff disputes or political tensions. Mexico is deeply integrated into the US market via the United States-Mexico-Canada Agreement (USMCA), and US pressure of even tariff threats alone have caused measurable economic damage. An actual invasion would multiply those effects dramatically. North American supply chains would collapse since Mexico is the largest goods exporter to the US, with exports exceeding USD 500 billion in 2024, and estimated to be around USD 700 billion in 2025, equal to 29% of Mexico’s GDP.

An invasion would instantly shut down cross-border manufacturing flows, halt just in time auto and electronics supply chains, freeze rail, trucking, and air cargo routes, and trigger corporate evacuations and factory shutdowns. The automotive sector would be hit first and hardest. Mexico is a key player in North American auto production and is deeply tied to US content and US buyers. An invasion would shut down cross-border auto parts flows, halt assembly plants in both countries, cause immediate shortages of cars, trucks, and components, and force US automakers to idle factories within days. Over 6,000 IMMEX manufacturers would stop producing product bound for the US, and a North American recession would be likely as the invasion causes a collapse in investor confidence, triggers capital flight, a peso freefall, freezes foreign direct investment, and disrupts US manufacturing and retail supply chains.

The U.S. would also face recessionary pressure due to supply chain breakdowns and price spikes. The USMCA would be functionally destroyed, but it may be anyway with the upcoming review in July of this year. (See my recent article on this: https://www.braumillerlaw.com/the-upcoming-usmca-cusma-t-mec-review-the-options-are-a-renegotiation-a-few-revisions-or-a-formal-exit/ ) In the upcoming USMCA negotiations, US representatives need to keep in mind that Mexico supplies the US with vehicles, electronics, machinery, produce and food, medical devices, and household goods. A US invasion of Mexico would cause massive shortages, raise prices sharply, disrupt retail supply chains, and ultimately hit low-income US households hardest. Inflation would surge, and global markets would react with shock and retaliation. And of course, the US, Mexico, and Canada trade agreement would be absolutely crushed.

This brings to mind the current status of the US-Canada relationship, which has taken another nosedive with recent comments by President Trump in Davos saying that Canada exists only because of the US. Canada has been studying a model of a potential US invasion, but, come on, would the US ever really invade Canada? Insert a good chuckle here because it reminds me of the South Park episodes called “Blame Canada” which had us going to war with each other based on the dumbest of reasons: https://www.youtube.com/watch?v=bOR38552MJA. It sounds like a joke, and so, perhaps, did President Trump suggesting the US annexing Canada to become the 51st state. However, Canadians certainly didn’t take it that way. Trade between the US and Canada hasn’t collapsed, but tensions have clearly distorted trade flows, raised uncertainty, and pushed Canada to diversify away from the US, primarily to the EU and China. Canadian Prime Minister Mark Carney’s recent visit to Beijing secured an open market for both countries – relenting on the canola and EV tariff war.

Regarding the US, ongoing tariffs and the “trade war” between the US and Canada have disrupted normal flows. Statistics via Canada data show that pockets of Canadian trade remain “significantly impacted by tariffs”. Canada’s overall trade balance flipped from a surplus to a deficit in October 2025 because of tariff-driven distortions. Imports from the US rose 5.3% in October – the first increase in four months – while exports to the US fell 3.4%. Canada’s trade surplus with the US was cut nearly in half in a single month. This is exactly what you’d expect when tariffs and political tensions create uncertainty, as imports surge in anticipation of future restrictions, while exports fall due to US barriers and weaker demand.

The current political climate, including US threats toward Greenland and broader hemispheric dominance rhetoric, has pushed Ottawa to the edge. Prime Minister Carney made this well known in Davos when he stepped up to the mic and argued that the US-led global order has fractured, describing it as a “rupture, not a transition”. He had previously stated that the longstanding system built around American hegemony with open sea lanes, stable finance, and collective security, is officially over.

Canada is signing new deals with the EU like the Canada-Europe Parliamentary Association (CAEU), which creates a formal security and defence partnership between Canada and the EU. This relationship opens the door for Canada to participate in ReArm Europe, the EU’s massive defence procurement programme, all exclusive of US participation. When it comes to trade, countries at the meeting in Davos in general are seeking more predictable partners than the US. They are, especially France’s president, Emmanuel Macron, standing up to the Trump Administration when it comes to unilateral global decisions that greatly affect others involved in a particular group, like NATO. I do not see any mending of fences in the near future between the US and Canada, so this continuous friction is just a snowball rolling down a huge Canadian hill.

Prior to this article becoming a book, because lord knows I have enough material regarding the global chaos, worth a mention are a few more countries which are also in the Trump Administration’s crosshairs: Cuba, Columbia, Nicaragua, Panama, Nigeria, Somalia, Yemen, and, perhaps, even New Zealand. Why the hell not, let’s just throw it in there. You Kiwis better stay frosty! What if the US were to invade New Zealand? This is an absolutely crazy, stupid scenario to imagine, but not much crazier than the US invading Greenland. Let’s call it another useful stress test for how deeply politics and trade chaos are wired together. A US invasion of New Zealand would be seen as an attack on a close democratic partner and US ally, very similar to of invading an island which is no more than a fishing village of 60,000 owned by Denmark. Today, the two countries describe their relationship as “broad and robust”, grounded in shared democratic values and a rules-based order which many consider to be the foundation of exactly what makes trade possible in the first place. Key operative words in the previous sentence are “rules based”.

If the US invaded New Zealand, all existing trade frameworks and dialogues (like the Trade and Investment Framework Agreement signed in October of 1992) would effectively collapse. Shipping, insurance, and logistics involving US-NZ routes would be disrupted or halted due to sanctions, boycotts, and security risks. Sanctions and diplomatic rupture would explode as NZ allies would join in the fight. New Zealand is tightly embedded in Western alliances and norms. It is also deeply attached to Australia, so Australia would get pulled into the fray along with Japan, as Japan and Australia now have one of the strongest strategic partnerships in the Indo-Pacific. Of course, as a state of Australia, Tasmania would join in. Cartoons of the whirling Tasmanian Devil come to mind, making it sound more wickedly dangerous than it really is to mess with Tasmania! 

New Zealand is a close US partner in security, space cooperation, and digital governance via the Christchurch Call, Artemis Accords cracking down on extremist content online. The relationship is framed explicitly around the “international rules based order”, like that of the EU and US. If the US violated that order by invading New Zealand, additional US allies such as the EU, UK, and Canada would face enormous pressure to sanction the US or at least restrict certain trade flows. There would be no backing down on a global scale, as the EU has shown the US by putting boots on the ground in Greenland. New Zealand would almost certainly seek coordinated economic responses with like-minded democracies since the US would no longer be considered one.

Global companies would be forced into a choice of either maintaining access to US markets or aligning with sanctions and reputational risk. The trade impact wouldn’t be just bilateral; it would spill into US trade with the greater democratic world. Sector impacts would come from food, aviation, and services. New Zealand’s top exports to the US include frozen bovine meat, wine, and dairy products, dairy being the largest export category. The US exports aircraft, aircraft parts, and other high-value industrial goods to New Zealand, which it could find elsewhere. Were the US to invade New Zealand, food exports from NZ to the US would likely be cut off by sanctions and global backlash. Aviation and defence-related exports from the US to NZ would halt immediately. Tourism and education flows (students, visitors, joint programmes) would collapse; services trade would crater. This would hurt New Zealand more in relative terms (given its smaller economy), but the US would take a huge reputational and strategic hit that would spill into other trade relationships.

Right now, New Zealand and the US emphasise a shared commitment to stability and cooperation, much like Denmark and Greenland have over the years by allowing as many as ten US military bases to occupy territory at one point. An invasion would flip that narrative on its head just as it has with the Greenland rhetoric from the White House. Greenland’s rhetoric has been quite blunt, telling the US to pretty much just “F” off. The US would once again be seen as unpredictable and willing to use force against partners, which obviously is already the case on a global scale. Smaller countries would accelerate diversification away from US dependence, and trade agreements where the US seeks “high standard, 21st century” rules would further lose credibility – possibly more credibility than it already has, but that’s a stretch. All of the turmoil doesn’t just affect US-NZ trade – it raises the risk premium on trading with the US at all on a global scale. New Zealand’s response, like Mexico and Canada’s, would be the mapping of diversification and alignment with global partners other than the US. New Zealand already trades globally and has experience navigating big power politics. Following Canada’s playbook It would deepen trade ties with Asia, the EU, and other Pacific partners. In the end, the US would lose not just another trade partner, but a symbolically important, highly trusted ally. Imagine that.