The US's decision to slap new tariffs on its trade partners is causing alarm across the world. Economist and former president of the New Development Bank, Marcos Troyjo, says the measures bring risk and uncertainty to all those affected, including American firms and consumers. Li Shuang explains.

Trade and investment expert Marcos Troyjo is an economist as well as a diplomat. He points to a contradiction in US policy: While the country promotes deregulation and tax cuts to attract foreign investment, it's also imposing sweeping trade restrictions that risk isolating the US economy.

MARCOS TROYJO, Fellow, INSEAD's Hoffmann Global Institute for Business and Society, São Paulo "It seems to me that the current administration has a wrong diagnosis of some of the US challenges. And because it has the wrong diagnosis, it's implementing policies that I think at the end of the day would not only harm the US consumer, US firms, but the global economy as a whole."

For US multinationals, the shift in policy could force costly realignments and reduce profitability.

MARCOS TROYJO, Fellow, INSEAD's Hoffmann Global Institute for Business and Society, São Paulo "Imagine a company that has recently made an investment in a manufacturing plant in Thailand, a distribution center in Morocco, and a finishing plant in Mexico. If all of a sudden, because of current trade and industrial policy, everything has to be redirected to manufacturing in the United States, profitability is going to be cut, dividends to be paid will be cut, and this is going to hurt the performance of American companies in stock markets."

With the US and China representing two of the world's largest economies, any fallout from this trade dispute could ripple across the globe.

MARCOS TROYJO, Fellow, INSEAD's Hoffmann Global Institute for Business and Society, São Paulo "I don't think that signals a very promising path forward. I truly hope that this is only a result of a kind of negotiation tactics, although it does bring about a lot of confidence a lot of trust that will take a long time to recover. But this is definitely going to hurt global economic performance."

Still, Troyjo sees opportunity amid the disruption. With US trade policy turning inward, new partnerships may emerge—particularly between China and Europe, or with major food exporters like Brazil and Argentina.

MARCOS TROYJO, Fellow, INSEAD's Hoffmann Global Institute for Business and Society, São Paulo "De-globalization does not necessarily mean the contrary of globalization. It means that there will be a new chapter of globalization that's being written. 25 years ago, Brazil China trade was $1 billion a year. Today Brazil China trade is $1 billion every 55 hours. This is going to be a window of opportunity for a country like Brazil, for a country like Argentina as well."

As for US consumers—the immediate effect could be felt on store shelves and price tags. Troyjo warns that domestic capacity simply can't replace global supply chains overnight.

MARCOS TROYJO, Fellow, INSEAD's Hoffmann Global Institute for Business and Society, São Paulo "Yes, the consumer will pay. And let's not forget that the US is the biggest consumer market in the world, it's the biggest importer of the world. There's not going to be either in scale or in terms of speed domestic alternatives."

The question is whether this chapter leads to a more fragmented global economy—or promotes a rethink in Washington. Li Shuang, CGTN, Beijing.