As countries reassess their trade policies, growing uncertainty poses a risk to economic success. While multilateral and regional agreements have typically stabilized these policies, a series of measures in 2025 have weakened rule-based trading systems and heightened volatility in trade rules.
This was among the key findings of a recent report from the United Nations Conference on Trade and Development (UNCTAD), which noted that uncertainty in trade policy is already causing major disruptions to global markets.
Volatility across global markets
UNCTAD noted that with trade policies placing pressure on the global economy, concerns such as border control, tariffs and competition are expected to rise. Uncertain policies can limit market access, jolt exchange rates, erode trust between trading partners and slow development.
The recent tariffs on imports in the US have already caused fragmentation across global markets. This example offers a glimpse of what may lie ahead. With the scale, scope and timing of policy shifts unclear, businesses and governments struggle to adapt, often reacting early in ways that unsettle markets before changes even take effect.
"These uncertainties leave many exporters in low-income countries unsure of future
market access conditions, undermining their ability to plan export strategies, attract investment and participate effectively in international trade and global supply chains," the report explains.
These factors undermine economic stability and dampen growth, especially in trade-dependent economies.
Risks for uncertainty
While trade policy uncertainty is affecting the majority of markets worldwide, not all economies will feel this equally. More vulnerable countries, such as developing nations, as well as smaller firms, are likely to suffer greater economic impact. Factors such as less diverse export markets, over-reliance on imports and participation in fewer trade agreements leave companies and governments vulnerable during times of policy uncertainty.
The report observed disruptions to supply chains and reduced investment will also greatly affect lower-income economies and smaller firms, as these lack the resources to effectively respond and adapt policies and strategies.
Larger scale businesses working in multiple markets and countries with greater export bases are able to cushion the loss of revenue with a diversified economic strategy. The study also highlighted the benefits of participating in free trade agreements, as these provide a protective framework that reduces volatility and encourages long-term investment.
Reducing uncertainty, strengthening resilience
To safeguard global trade and support continued growth, transparency is essential. The UNCTAD suggests that governments focus on the following strategies as ways of mitigating the effects of policy changes:
- Providing advance notice of policy changes to help affected parties to plan, prepare and respond accordingly.
- Adapting policies based on clear, data-driven reasoning to reduce strategic ambiguity.
- Supporting international coordination through global trade bodies such as UNCTAD and the World Trade Organization to create clear methods of negotiation.
- Strengthening trade agreement commitments to protect businesses from the shocks of sudden policy changes.
- Diversifying export markets to reduce dependency on one market and reinforce stability across operations.
Trade policy uncertainty is unavoidable, but, in order to prevent the ripple effects of policy shifts and worldwide economic disruptions, predictability is important to navigate and transition constructively.