ICC report highlights business concerns amidst evolving trade policies

ICC report highlights business concerns amidst evolving trade policies - Trade Treasury Payments

The International Chamber of Commerce (ICC) released its 2025 global trade outlook after conducting consultations and focus groups with business leaders around the world.

The report emphasises the growing level of trade restrictions implemented since the 2008 financial crisis, including a larger wave in the past few years, and explores how businesses are facing challenges stemming from the uncertainty these restrictions create.

In 2024 alone, the world’s governments implemented over 3000 trade-restricting measures, such as tariffs, export controls, and investment restrictions, fragmenting global trade relationships and increasing operational uncertainties for firms.

The ICC warns that developing countries are particularly vulnerable. If the multilateral trade system continues to erode, these nations are liable to experience a 33% reduction in merchandise trade and a permanent GDP loss in excess of 5%.

These geopolitical pressures and tariff uncertainties are forcing businesses to find ways to mitigate their risks such as by diversifying supply chains, stockpiling essential inputs, or adjusting their pricing models. All of these measures take time to implement and impact profitability.

The newest protectionist measures are also expected to impact a much larger number of firms than similar measures from the past. Many firms that previously reported being unaffected are now anticipating being directly impacted by the changes.

Call for collaborative policy development

In the report, the ICC proposes several recommendations to strengthen the global trade system, including reinvigorating multilateral trade negotiations, pursuing plurilateral initiatives, and enhancing negotiation mechanisms.

The organisation urges WTO member states to focus on practical and solution-oriented discussions to overcome the current deadlock in trade negotiations. This involves tackling persistent trade issues, such as rising tariffs, disruptions in supply chains, and inconsistencies in regulations that impede cross-border trade. Additionally, the ICC emphasises the need to update global trade rules to address modern challenges, including digital trade, climate change policies, and changing industrial strategies.

On the plurilateral front, the ICC advocates for smaller groups of like-minded countries to negotiate targeted agreements on specific trade issues. The idea is that these smaller agreements, which are less likely to suffer from the political gridlock of their multilateral counterparts, will complement rather than replace the multilateral efforts.

Modernising trade dispute and negotiation mechanisms – another of the ICC’s recommendations – will help improve transparency, speed up decision-making, and avoid long, drawn-out conflicts. The ICC also stresses the need for businesses to have a bigger voice in trade talks and suggests using digital tools to make negotiations smoother.

As the report says, “Only through collective action can the integrity of the global trading system be upheld to the benefit of businesses and their communities worldwide.”