In its October 2025 Global Trade Update, UNCTAD underscores that global commerce continues to perform robustly, despite rising policy uncertainty, tariff shifts, and geopolitical frictions. The paradox is that while headline trade volumes and values remain strong, the underlying currents suggest growing stress and structural challenges for many economies.

A central theme in UNCTAD's analysis is the mounting level of trade policy uncertainty, which in many cases is becoming a structural feature rather than a short-term shock. Governments are increasingly turning to strategic ambiguity, changing tariffs, subsidies, or compliance rules with little warning, making planning across supply chains harder. According to Trade Finance Global commentary on UNCTAD's update, this uncertainty reached record levels in 2025, with smaller exporters and least-developed countries bearing the brunt.

The ripple effects include delayed investment decisions, overstocking or under-ordering, contract renegotiations, and increased financing and hedging costs. In particular, smaller firms are less able to absorb this volatility, making them more vulnerable to policy shifts in major economies.

UNCTAD highlights that imports from developing countries have shown more extreme fluctuation than those of advanced economies, suggesting that volatility is concentrated in markets with less diversified trade structures. The report notes that the worst of disruption often arrives later in least-developed countries, reflecting delayed effects of global shocks.

One bright spot is that many economies are leveraging market diversification. For example, exporters facing soft demand or restrictive conditions in the US are seeking alternative trading partners in Asia, Africa, or Latin America. Chinese exporters, in particular, are reported to have pivoted away from US markets toward ASEAN and African buyers, sustaining overall export growth despite tariff pressure.

A recurring adaptation strategy is front-loading;exporters accelerate shipments ahead of anticipated tariff hikes or regulatory changes. While effective in the short term, this tactic amplifies downstream pressure, especially when demand softens. UNCTAD observes that volatility in US imports already rose before tariff measures took effect, reflecting speculative ordering and supply chain repositioning.

Despite these adaptive strategies, not all economies share in the resilience. The headline numbers of trade value growth mask fragility: many SMEs and export-dependent regions operate under thin margins, limited access to credit, and weak buffers against input price inflation. Moreover, since many disruptions are policy-driven rather than demand-driven, the tailwinds of trade liberalisation are weakening.

UNCTAD argues for the urgent restoration of predictability and trust in trade frameworks. The report advocates that governments provide adequate advance notice for trade policy changes, carefully calibrate tariff moves, consult stakeholders, and enhance transparency. In parallel, exporters should continue to diversify markets, invest in long-term trade agreements, strengthen supply chain flexibility, and build resilience into their logistics and financing strategies.

Further information: https://unctad.org/publication/global-trade-update-october-2025-global-trade-remains-strong-despite-policy-changes-and

This article represents the views of the author and not necessarily those of the ICC.

Dave Meynell