Global trade is now affected not only by tariffs or geopolitical tensions but also by policy uncertainty. This situation increases costs, unsettles markets, and hits developing countries the hardest.
The Global Trade Update published by UNCTAD shows that uncertainty raises costs, destabilizes financial markets, and deepens disparities between countries.
In the first quarter of 2025, the Trade Policy Uncertainty Index reached record levels. Companies face tough decisions, such as stockpiling goods, rerouting shipments, or bearing higher transport costs. Uncertainty often proves more costly than tariffs. Small exporters and developing countries suffer the most due to limited resources.
Uncertainty extends beyond ports. Exchange rates fluctuate, capital flows tighten, and borrowing costs rise. This particularly affects developing countries with limited access to trade finance, reducing investment and increasing fiscal vulnerability.
The greatest damage comes from a loss of trust. When policies are unclear, countries take unilateral actions, prompting retaliation. This increases volatility across supply chains, leaving the most vulnerable economies exposed.
In conclusion, uncertainty has become the new “tariff” in global trade. Diversifying markets, strengthening trade agreements, and providing predictability in policy changes are key ways to mitigate these risks.
Resorce: Unctad
