As we navigate the complexities of global trade in 2025, exporters in the Bay of Plenty and beyond are facing unprecedented challenges and opportunities. The recently published Global Trade Outlook 2025: Industry Insights report by the International Chamber of Commerce (ICC) sheds light on the current state and future prospects of global trade. This comprehensive analysis is essential reading for anyone involved in international trade. Click here to access the full report..
The Changing Landscape of Global Trade
The report highlights the increasing pressures on global trade due to evolving economic and geopolitical factors. Since the 2007-2008 global financial crisis, there has been a rise in trade-restricting measures, contributing to trade fragmentation and deglobalization. In 2024 alone, over 3,000 trade restrictions were implemented globally, leading to greater uncertainty and higher costs for businesses.
Key Themes from the Report
Rules-Based Trading System: Businesses emphasize the need for a stable, transparent, and predictable global trading system anchored in a fully-functioning World Trade Organization (WTO). The stability provided by such a system is crucial for long-term investments and cross-border trade.
Unilateral Trade Measures: The risk of retaliation to unilateral trade measures raises concerns about a domino-effect race to the bottom, affecting all countries. This highlights the importance of multilateral engagement and cooperation.
Impact on Firms: New trade policies are expected to affect a larger array of firms, especially in a post-COVID-19 environment characterized by higher interest rates, sticky inflation, and record debt levels. Businesses need to be agile and adaptable to navigate these challenges.
Business Adaptations: Companies are diversifying suppliers, stockpiling inputs, and adjusting pricing strategies to cope with trade policy uncertainties. These adaptations are essential for maintaining competitiveness in a volatile market.
Supply Chain Resilience: Efforts to strengthen supply chain resilience are constrained by a shortage of skilled workers and related suppliers. Investing in workforce development and supplier relationships is key to overcoming these challenges.
Spotlight on Tariffs
Tariffs remain a significant concern for businesses. The report stresses the importance of resolving uncertainty and ensuring policy transparency regarding tariffs. Tariffs negatively impact profitability, market share, investment, and potential price hikes. To mitigate these effects, firms are diversifying suppliers, lengthening supply chains, and stockpiling inputs.
Business Response and Adaptation Policies
Education and Compliance: Companies need to thoroughly understand trade regulations and tariff structures. Staying informed and compliant is crucial for avoiding costly penalties and disruptions. Reach out to the Chamber’s International Documentation team if you have questions on customs documentation and other new requirements.
Supply Chain Strategies: Effective supply chain strategies and contingency planning are essential. Businesses should regularly review and update their supply chain plans to ensure they can respond quickly to changes in the trade environment. Businesses are shifting from maximum efficiencies (‘just-in-time’) to a supply chain that provides flexibility and options (‘just-in-case’).
Leveraging Technology: Technologies like artificial intelligence can enhance adaptability. By leveraging AI, businesses can gain insights into market trends, optimize operations, and improve decision-making.
Engagement with Business Organisations: Active engagement with chambers of commerce, industry associations, and key Government agencies is crucial. These organisations provide valuable resources, networking opportunities, and advocacy for business interests.
Conclusion
The private sector urgently needs predictability and certainty to operate effectively in global markets. Sustained multilateral engagement and a rules-based system are essential for international trade relations. The WTO provides a stable foundation for cross-border trade and long-term investments.
As we move forward, collective action among governments, businesses, and civil society is vital to support and strengthen the WTO. By working together, we can create a more stable and prosperous global trade environment.
For more detailed insights, be sure to check out the full Global Trade Outlook 2025: Industry Insights report.
Note: Tauranga Business Chamber is a member of the New Zealand Chamber of Commerce Inc, which is a member of the International Chamber of Commerce (ICC) with 45 million members worldwide.
