Global trade strains deepen as ICC survey shows rising uncertainty

Trade conditions have deteriorated across much of the global economy, with more than half of participating Chambers of Commerce reporting a worsening outlook, according to the International Chamber of Commerce (ICC) latest Global Economic Survey.

The findings reflect rising pressure from tariffs, inflation, geopolitical tensions, and access to finance constraints. The survey, published during the ICC World Chambers Congress in Melbourne, gathered perspectives from over 240 Chambers across 110 economies representing 90 per cent of global GDP.

Concern drivers vary worldwide: tariffs, inflation, and labour shortages in North America; taxation and geopolitical tensions in South Asia; political instability and inflation in Latin America and the Caribbean; and access to finance challenges in Sub-Saharan Africa. These findings align with the United Kingdom’s situation, where the British Chambers of Commerce (BCC) reports declining exporter confidence, squeezed margins, and persistently weak investment sentiment.

Customs procedures remain the top barrier for UK exporters, cited by 45 per cent of firms. A further 20 per cent report having planned to establish or expand a commercial presence in the EU to navigate these barriers. A smaller but notable 9 per cent say they have been prompted to diversify into non-EU markets have similar trading requirements.

Amid rising trade frictions, firms globally are adjusting not through large-scale relocation but through diversification. East Asian businesses are increasing intra-regional trade, European companies are expanding within Europe and Asia, and Latin American firms are deepening connections across the Americas while engaging China and the EU. North American companies are reducing reliance on Chinese suppliers in favour of Canadian and European partners.

Crucially, the ICC survey identifies uncertainty as the single biggest barrier to global trade, surpassing tariffs. This challenge is particularly acute in Europe, East Asia, South Asia, and Latin America. The UK continues to feel the effects of political and regulatory unpredictability, which businesses say hinders investment more than cost pressures.

Despite these difficulties, nearly half of Chambers remain optimistic about future conditions. Trade digitalisation is seen as a key opportunity. The ICC and WTO highlight the potential of artificial intelligence and digital trade systems to dramatically enhance supply chain efficiency and global market access. The WTO estimates AI could increase global trade value by nearly 40 per cent by 2040. However, without inclusive policy frameworks, such gains risk reinforcing existing global inequalities.

The ICC said that without a renewed, cooperative multilateral framework, fragmentation could deepen, with estimates suggesting developing economies could face a 33 per cent drop in goods trade and permanent GDP losses.

ALCHEMPro News Desk (HU)