Facts: Discharge and release of cargo without OBLs 

Valency International Pte Ltd (“Valency”) provided letter of credit (LC) financing to K.I. (International) Limited (“Kamachi”) for Kamachi’s purchase of 55,000 metric tonnes (MTs) of steam coal from JSW International Tradecorp Pte Ltd (“JSW”). The cargo was shipped from South Africa to Krishnapatnam port in India on the MV Stella Cherise (the “Vessel”), and 22 BLs were issued in its respect. JSW had chartered the Vessel from Oldendorff Carriers GmbH & Co KG (“Owners”), and requested Oldendorff to nominate Unicorn Maritime (India) Pvt Ltd (“Unicorn”) as the discharge port agent. The cargo was discharged at Krishnapatnam port without the production of bills of lading by 31 August 2018 against a discharge letter of indemnity. The cargo was however not released to the receiver, Kamachi, because of its ongoing demurrage dispute with JSW. 

Shortly afterwards, on 10 September 2018, HSBC made payment under the LC, and Valency obtained an import trust receipt loan to repay HSBC. Valency also pledged to HSBC, by way of security, the 22 BLs for the cargo; and sent to HSBC a trust receipt for the release of the 22 BLs on the conditions (as are usual for trust receipts) that Valency would:

• receive the 22 BLs and take delivery of the cargo “exclusively for the purpose of selling [it] unless [HSBC] shall direct otherwise”; and
• hold the 22 BLs, the cargo and the proceeds of their sale on trust for HSBC and solely to HSBC’s order.

Valency collected the 22 BLs from HSBC under the trust receipt in two batches – on 13 September 2019 and 24 September 2019. Meanwhile, Kamachi was chasing Owners for the release of delivery orders for the cargo, which JSW was resisting on account of Kamachi’s failure to settle demurrage with JSW. Owners eventually took the position that demurrage was a matter for Valency to settle with Kamachi, and instructed Unicorn on 13 September 2018 to issue delivery orders for the Vessel. JSW also followed suit on 17 September 2018, and instructed Unicorn to release the delivery order for the cargo. Unicorn accordingly issued delivery orders and Kamachi obtained delivery between 17 September 2018 and 15 November 2018. 

Meanwhile, Valency’s import trust receipt loan with HSBC fell due on 24 September 2018. In order to settle this loan, Valency obtained two further loans from HSBC on 24 and 25 September 2018 by discounting (with recourse to itself) the 22 BLs with the bank. Kamachi however failed to pay for the cargo, making only one payment for 2,500 MT (of the 55,000 MT) of the cargo. 

Unicorn released all the cargo to Kamachi, but misrepresented to Valency that the balance of the unreleased cargo was 52,500 MT. It repeated this misrepresentation at least three times. Valency brought multiple claims against Owners, JSW, and Unicorn, including a claim for conversion of the cargo against the Owners and JSW on account of their release instructions for the cargo. 

Finding: A right to sue for conversion rests on possession or immediate right of possession

Valency’s claim in conversation against both the Owners and JSW failed. Central to the failure was the Court’s finding that Valency did not have actual possession, or the immediate right to possession, of the unpaid cargo at the time of the alleged conversion. 

On the facts, Valency argued that it had the immediate right to possession of the unpaid cargo on the basis that it had possession of the BLs. The Court, however, noted that the capacity in which Valency had possession of the BLs did not give it an immediate right to possession. At the time Owners and JSW issued release instructions, the 22 BLs were pledged to HSBC and released to Valency only under a trust receipt. The Court noted that where goods are pledged, the pledgee (in this case, HSBC) has the right to their possession. Until the underlying debt for the security is paid, the pledgee is the only person who may sue for conversion of the goods. The Court also noted the well-settled position that a trust receipt does not destroy a pledge, but maintains it despite the pledgee releasing BLs back to the pledgor. 

On the facts, Valency pledged the 22 BLs to HSBC as security for the import trust receipt loan on 10 September 2018, and obtained possession of the BLs on 11 September 2018 under a trust receipt which expressly preserved HSBC’s security interest. As noted, Valency repaid the import trust receipt loan on 24 and 25 September 2018. 

As such, from 11 September to at least 24 September, the BLs were pledged to HSBC, who was the party with the immediate right to possession to the cargo. 

For completeness, it is added that Owners and JSW also argued that since Valency was not named in the Import General Manifest (“IGM”), it could not have obtained delivery of the cargo from the Krishnapatnam Port authority. The IGM is a legal document containing information about the goods imported and the consignee or importer (if different), which the carrier or the discharge port agent was required to file. 

The expert witnesses for Valency and Owners agreed that under the IGM that was filed, only Kamachi was entitled to take delivery of the Cargo from the port and that certain steps had to be taken (including amending the IGM) or if necessary, a court order, before Valency could take delivery of the unpaid cargo from the port. The Court rejected this argument and clarified that the immediate right to possession, for the purposes of making a claim for conversion, refers to the right to legal possession. The fact that Valency had to take certain steps (including, if necessary, obtaining a court order) affected Valency’s ability to take actual possession of the Unpaid Cargo but did not affect Valency’s right to legal possession.

Comment: Pledged BLs under trust receipt  

It is often said that the BL holder has the right to sue for the goods in a claim for conversion: but this has to be qualified where the BLs have been pledged to a lender with the actual BLs released under a trust receipt mechanism. Applying trite principles, the Court clarified that the pledgor in such a case merely holds the BLs on trust for the bank. Since the trust receipt does not destroy the pledge, the right to possession of the goods remains with the pledgee bank, and a pledgor cannot therefore sue for conversion of the goods in its own right while the pledge remains on foot.  

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An ITFA working group has recently developed a template for financial institutions (FIs) granting short-term trade loans via the SWIFT MT799 format. 

The SWIFT MT799 is commonly used by banks to communicate non-binding information on trade finance transactions. While widely used, this system has historically lacked the uniformity to operate across multiple jurisdictions. This has led to difficulty for banks seeking to obtain foreign currency financing, contributing to the barriers to finance which many emerging markets face.

The new template aims to enhance this accessibility for both borrowing and lending banks. It offers clear guidance on topics from floating rate loans with periodic interest resets to different governing laws, and is designed to be concisely focused on practicality. 

Paul Coles, chair of ITFA’s Market Practice Committee, led the working group, which included experts from Sullivan and FCMB Bank (UK).

Geoffrey Wynne, a partner at Sullivan and part of the ITFA working group which developed the template, said, “This template is important because, by provides a starting point for banks to document short term trade loans using SWIFT, it should reduce the time needed to negotiate and finalise the relevant trade loan agreement. 

“While it provides a starting point, the template also allows for the customisation of the documentation to meet the specific needs of individual transactions. We hope this will be key to its success.”

ITFA has emphasised that this template exists to complement other comprehensive frameworks, but focuses on standalone, one-off loans that are solely documented through SWIFT messaging.

The standardisation of this format is intended to provide a benchmark of “what good looks like”. 

The template and accompanying guidance notes are now available to ITFA members through the association’s website, though users are advised to seek legal advice before implementation.

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The International Monetary Fund (IMF) has just published its World Economic Outlook as of April 2025, portending a fall of global GDP growth by 0.5%, to 2.8% for the year. 

This is largely the result of the “major negative shock” that US President Donald Trump’s tariffs have imposed on the global economy.

The report is structured in three chapters, covering global policy, demographic impacts (including of an ageing population), and the impact of refugee and migration policy on economic growth, particularly within developing economies.

Since February, the US has announced multiple waves of tariffs against trading partners, culminating in near-universal levies on 2 April, which triggered historic drops in equity markets. Though markets partially recovered following pause announcements after 9 April, uncertainty—especially regarding trade policy—has surged to unprecedented levels.

The impacts of tariffs, IMF reports, vary considerably across countries. In the US, where demand was already softening, growth projections have been lowered to 1.8% for this year, with tariffs accounting for nearly half the reduction. China’s growth forecast has been cut to 4%, reflecting weaker external demand. The eurozone faces a more modest reduction to 0.8%, with stronger fiscal stimulus providing some offset.

Source: IMF

Global trade growth is expected to decline more severely than output, dropping to just 1.7% in 2025. 

The report presents several forecast scenarios reflecting differing policy paths. A pre-April 2 forecast (excluding the most recent tariff escalation) would have yielded 3.2% global growth in both 2025 and 2026. A model-based forecast incorporating announcements after 9 April suggests that even with temporary halts to some tariffs, global growth prospects remain similar to the reference forecast due to elevated US-China tariffs and continued uncertainty.

Despite the slowdown, global growth remains above recession levels. The IMF recommends restoring trade policy stability and forging mutually beneficial arrangements to address longstanding gaps in international trading rules. 

Domestic imbalances contribute to uneven growth, with high consumption in the US, weak demand in China, and subdued manufacturing activity in many economies. Addressing these underlying issues could help offset economic risks and close external imbalances whilst building a more inclusive trading system.

Interestingly, the IMF’s inflation forecast has been relatively stable. Emerging and developing markets in Asia, in particular, are expected to see more muted inflationary pressures. Yet this outcome is a likely result of the negative demand shock which tariffed countries are experiencing as export demand diminishes. Furthermore, rising import prices from a trade war could increase already tentative inflationary pressures.

In this vein, the IMF notes that since over 80% of trade invoicing is conducted in US dollars, this projection could be reversed if the USD appreciated. 

Source: IMF

To doubt is to waver

Trade policy uncertainty has become a major impediment to economic growth, with the prolonged elevation of this uncertainty causing investment distortions and market volatility. 

Trade uncertainty, the IMF emphasises, weighs adversely on supply- and demand-side indicators, creating a cycle of negative wealth effects. 

The impact of this trade uncertainty manifests in financial market volatility, supply chain disruptions, and dampened investment.

To mitigate these impacts, the IMF recommends international cooperation through regional and cross-regional groups to sustain global growth and tackle common problems. It suggests that a stable and predictable trade environment could be achieved through pragmatic cooperation and deeper economic integration, including non-discriminatory unilateral reductions of trade barriers or expanded trade at regional, plurilateral, or multilateral levels.

The IMF also cautions against broad subsidies as a response to trade distortions, noting they generate large fiscal costs and additional distortions. While targeted industrial policies may alleviate specific sectoral market failures in certain cases, they should be subjected to a comprehensive cost-benefit analysis and narrowly focused on well-identified market failures to minimise distortions.

Reducing policy-induced uncertainty would at least go some way in working against the bubble of uncertainty which global trade currently doesn’t seem capable of bursting.

“Power hungry”: The impact on commodity markets

The future of commodities markets appears to be characterised by this same increasing volatility and changing dynamics across different sectors, as geopolitics and technology developments prove a double-edged sword: but also pose room for opportunity. 

The report highlights some key metrics influencing their conclusion:

• In energy, oil prices declined 9.7% between August 2024 and March 2025, with further plummets in early April amid escalating trade tensions.
• Natural gas prices rose until March 2025 but reversed course in April, with futures suggesting declining prices through 2030.

• The IMF’s metals price index increased by 11.2% between August 2024 and March 2025, driven mainly by gold, aluminium, and copper.
• Gold prices have repeatedly set new records amid policy and geopolitical uncertainty, hitting $3,500 today.

• The IMF’s food and beverages price index increased by 3.6%, driven by higher beverage prices.
• Coffee prices jumped 33.8%, reaching historic highs due to weather-related supply concerns; on the flip side, rice prices fell 26.0% as crop conditions improved in India and other parts of Asia.

Trade war fears are adding to the “already-bearish outlook” in these markets, and a major structural shift is occurring with AI-related data centres dramatically increasing electricity demand. By 2030, AI-driven global electricity consumption could reach 1,500 TWh, comparable to India’s current total electricity consumption.

The future outlook appears to be one of continued volatility, with balanced risks for energy markets but significant structural changes due to technological developments like AI, which will reshape energy demand patterns and potentially impact all commodity markets through their effects on economic growth and costs.

—

The report comes as many world economies seek to reroute supply chains, creating an environment in which decades-old alliances are being rethought. The IMF report has forecasted relatively more stable economic growth, which fell just 0.3% to 6.2% in 2025; yet US Vice President JD Vance’s recent visit to Indian Prime Minister Narendra Modi has highlighted the paradoxicality of cutting China out while relying on their materials for manufacturing.

This, and similar contradictions, are what has led the IMF to call for “prudence and improved collaboration” across industries and national boundaries. Fiscal authorities face particularly difficult choices amid high debt levels, rising financial costs, and new spending demands, including increased defence expenditure in some regions. 

The IMF highlights that the global economy needs a “clear and predictable trading system, addressing longstanding gaps in international trading rules, including the pervasive use of non-tariff barriers or other trade-distorting measures.” Countries must remain agile to stay afloat.

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The WTO’s Global Trade Outlook for April 2025, published on Wednesday, 16 April, presents a grim view of international trade, one marred by reciprocal tariffs and fears of a worldwide trade war.

In its first report since Trump’s broad-ranging tariffs came into effect, the WTO revised its estimates of global trade volumes, forecasting they would fall by 0.2% in 2025 and pick up slightly in 2026, rising by 2.5%. In the October report, trade volumes were predicted to rise by 3% in 2025 after a strong 2.7% growth in 2024.

A forecasted 1.7% reduction in North American trade is largely responsible for the shift, while merchandise trade is expected to keep rising, albeit less than previous estimates, in the rest of the world. The most marked decrease is expected to be in Asian trade, now forecasted to only grow by 0.6% compared to the impressive 7.4% growth projected in the October report. 

This comes as tariffs imposed by the Trump administration come into effect all over the world; while many of the headline-making country-specific tariffs have been halted for 90 days, the 10% baseline tariff remains for all exports to the US. Nevertheless, the trade uncertainty caused by the tariff announcements and fears of further tariffs on specific industries, like pharmaceuticals or metals, is responsible for the “significant reversal” in estimates, said the WTO. 

US tariffs on China, the only ones not subject to the 90-day delay, currently stand at 145%, with a 125% reciprocal tariff levied by China on US goods. This is expected to lead to a sharp fall in US imports from China, creating opportunities for suppliers from emerging economies to fill the gap. Similarly, Chinese exports to all regions except North America are expected to rise by as much as 9% as goods are redirected outside the US.

If the currently suspended tariffs were to come into effect, they would lead to a further reduction of 0.6% in global trade, with emerging economies bearing the brunt of the effect. A rise in trade policy uncertainty, for example if more countries enacted reciprocal tariffs against the US, could lead to a further 0.8% decline, for a total of -1.5% trade growth in 2025.

The report marks the first time the WTO measures trade in services, a growing but oft-overlooked sector in global trade. Services trade is expected to grow significantly in 2025, but tariff-related uncertainty and a decrease in global trade will see it rise by just 4%, more than a percentage point below pre-tariff estimates. 

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The web-based solution, called Global Trade Konnect (GTK), was conceived as a combination of Komgo’s most successful products over the past six years and will function as a full-stack solution for corporates looking to take control of their trade finance operations. 

As international tensions rise and fears of a global recession come closer and closer to reality, companies are rushing to strengthen their risk strategies. Trade finance can play a crucial role in increasing resilience and optimisation – but challenges like information misalignment, inefficiency, and fragmentation can make processes much slower and more complicated than they need to be.

This means having the correct tools to handle internal processes and overcome these challenges is becoming more and more important. Through GTK, Komgo proposes a scalable, smart, and connected solution to simplify daily trade finance operations through digital management. 

GTK is intended as a combination of a series of Komgo products covering all aspects of the trade finance pipeline and its instruments, from standby letters of credit to corporate guarantees and contracts. Capabilities from @Globaltrade, the platform Komgo acquired with GTC, will be combined with the secure communication channel and longtime Komgo staple Konsole APIs, digital document layer Trakk, and AWS’s advanced cloud capabilities.

Through streamlined and secure communication channels, companies will be able to replace emails, paper documents, and wet-ink signatures with a single digital workflow. This will enable them to manage the entire life cycle of thousands of trade instruments all in one place, which will be integrated with a range of communication channels to enable connectivity with all financial institutions. 

Advanced AI integration will drastically increase efficiency, accelerating manual processes by at least 50%. Automatic letter of credit drafting and checking, fee calculation, and bank guarantee issuance will streamline processes, while accurate and timely notifications will make it possible for even non-automated steps to be completed more quickly.

GTK’s reporting capabilities will make it easier to generate operational reports and analytics, and the data it generates will give companies the power to make accurate forecasts and improve their decision-making. 

Through GTK, Komgo has harnessed the power of the most exciting technological advancements – document digitisation, interconnectivity, and AI – to produce a copilot for corporates looking for a way to manage their trade finance activities. In today’s highly fragmented, fast-moving world, companies must be flexible and resilient. GTK promises to bring the best of Komgo to help them navigate this.

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In the trade finance industry, what many are wondering is: will these changes hurt trade finance, supply chain finance, factoring, and every other kind of financial vehicle connected to international trade?

Fortunately, there are ways to predict the tariffs’ effects – for example, using the data from the last trade war, which happened between 2017 and 2019, as a frame of reference. During that time, the devastating Covid-19 pandemic was also compounding the disruption impacting trade and therefore trade finance.

Global trade did decelerate in 2019 when President Trump imposed tariffs during his first term in office. However, as a report by Allianz Global Investors points out, “a closer examination of broader data suggests Mr Trump’s tariffs may have disrupted global trade only marginally.”

Despite the tariffs, international trade as a share of global GDP exceeded 60% for the first time in a decade only 3 years later, in 2022.  As many expected, trade did contract between China and the US, but growth from other regions offset the reductions. 

During the first trade war, supply chain finance grew at a compound annual growth rate of 26% from 2017 to 2023 despite an increase in global protectionism and tariffs.

Factoring finance ⏤ mainly used by small businesses and mid-market companies to raise finance against their invoices payable ⏤ still grew at a rate of 5%, despite the same headwinds and uncertainty.

If everything plays out along similar lines, then we can expect similar outcomes during this trade war.

The potential of trade finance distribution

Trade finance distribution is a way of unlocking liquidity from trade finance products. Once an originator (like a bank or fintech) provides financing, they can sell or distribute individual or groups of trade finance products to other investors in the market.

This is usually done on an “originate-to-distribute” (OTD) model to ensure a bank is holding on to large volumes of trade finance exposure on their balance sheets. It unlocks opportunities and growth revenue for every party in the transaction. 

How funds and documents flow in supply chain finance (SCF)

For banks, asset managers, institutional investors, non-bank lenders, and alternative credit funds, the attraction of trade finance and distribution is hard to ignore:

• Trade finance is a high-growth sector, currently worth $9.7 trillion and a projected growth of 3.1% in the next 10 years.
• 80 to 90% of global trade relies, in some way, on trade finance.
• There is currently a massive trade finance gap, estimated to reach $2.5 trillion this year. This trade finance gap is especially high in Africa, Asia, and the United Arab Emirates.
• Supply chain finance continues to grow at a yearly rate of 7% and is currently worth $2.34 trillion
• Asia and Africa are seeing the fastest growth in volume of supply chain finance, up 29% and 17% year-on-year, respectively
• Trade finance instruments are always short-term, self-financing, self-collateralized, and can be insured. This makes them very attractive from an investor perspective.
• Unlike other asset classes, such as debt financing or even real estate, the default rates of trade finance and asset distribution have always been very low (in most cases, under 0.25%).

With all of that in mind, trade finance distribution seems like an opportunity that can’t be missed.

It’s one of the reasons Trade Finance Global launched the TFG Distribution Finance initiative in July 2023, which aims to identify and address unmet demands in the trade finance market, working towards closing the trade finance gap

At the same time, with the impending gradual phase-in of Basel III Endgame rules, (which starts on 1 July 2025) banks are keen to de-leverage balance sheets.

Fortunately, the IMF already thought about the impact of Basel III on trade finance. Despite the rules around Tier-1 banks (especially the global 37 with over $100 billion on their balance sheets), trade finance is “clearly not the target of the re-regulation exercise” because they are “low-risk, highly collateralized . . . with a very small loss record”, as the  IMF noted in a policy paper about Basel III in 2014.

All of this makes now the perfect time for banks, asset managers, institutional investors, non-bank lenders, and alternative credit funds to get into trade finance distribution or scale-up current operations.

The question is, can this be done without over-leveraging risk, or increasing headcount?

Accessing distribution sustainably

Trade finance distribution should unlock new revenue opportunities for banks, asset managers, or corporates.

If organisations understand the market, they can leverage against any risk factors and avoid increasing their headcounts unnecessarily.

For financial players getting into or scaling-up distribution, LiquidX’s white-label platform enables seamless integration of distribution into the organisation’s existing offerings while maintaining brand identity.

Thanks to LiquidX’s award-winning capabilities and a deep partnership with Broadridge  ⏤ a trusted global fintech leader ⏤ financial institutions wanting to enter trade finance distribution can outsource this function completely without needing to recruit more staff. LiquidX’s software takes care of everything, from digitization at one end to distribution at the other; its solutions cater to a network of over 90 banks and asset managers worldwide.

Digital solutions for trade finance distribution

Organizations looking to get into trade finance distribution or wanting to scale up existing operations should be cautious and do quality research first.  The steps and precautions to take will vary according to whether companies are starting from scratch and want to syndicate, buy, sell, or use an originate-to-distribute model, or if they are looking to grow their existing offerings.

One of the biggest challenges faced by companies is often managing the inflows and outflows of money and documents from different sources. Having a tool for managing multiple sources of data that’s platform-agnostic makes getting into distribution much easier. 

Now more than ever, distribution is a high-growth opportunity for banks, asset managers, institutional investors, non-bank lenders, and alternative credit funds. Using solutions like LiquidX can help companies take advantage of this opportunity and leverage the enormous potential trade finance distribution has to offer.

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Corporate lending and trade finance are undergoing a transformation – that much, everyone can agree on. Digitisation, AI, and a market that is in constant motion make the industry one of the most exciting sides of finance, ripe with opportunities as much as challenges. 

However, how to overcome these challenges – especially in a complicated geopolitical landscape – and evolve with the opportunities remains a hot topic.

Finastra, a global provider of financial software applications, hosted its annual Europe Corporate Banking Day along with sponsors Microsoft and Tech Mahindra to discuss just that.  In London, senior executives from across the banking, technology and sustainability sectors came together to discuss the key market and technological trends in the industry: here are 5 of their main insights.

​​1. The market is shifting

Institutional investors and private credit are increasingly dominating the market, with growing appetite for direct lending as borrowers seek the best financing options. However, the lending industry still faces many challenges related to transparency, interconnectivity, inefficiencies and balancing regulation with innovation. 

Global political and economic fluctuations are also creating new trade corridors, requiring institutions to be agile and flexible and driving a shift from payables to receivables finance. 

2. Corporates expect seamless services, but digitisation remains a challenge

Corporates demand banking services that are personalised, digital, instant, and both local and global. However, an audience poll identified digitisation as the biggest challenge and opportunity, cited by 44% of institutions. Across the industry, data remains largely in paper form, creating significant barriers. 

Banks must invest in customer-centricity by implementing truly digital customer journeys, straight-through processing and automation and reduce loan approval time. Technologies such as cloud, microservices, APIs, digital ecosystems, and agentic AI will play an important role in banking’s evolution.

3. Industry expertise is declining 

As the next generation enters the workforce, institutions must capture knowledge from experienced workers before they retire, storing it in a structured database. More admin-focused roles must be migrated, upskilled, and digitized to attract younger talent. An audience poll revealed that talent attraction and retention were the biggest challenge and opportunity for almost a quarter of respondents.

4. AI is here to stay

When implemented correctly, AI can augment human capabilities, deliver automation and increase efficiency and speed in ways that would have been unthinkable just a few years ago. Large language models serve as a valuable resource for information, bridging knowledge gaps and facilitating faster decision-making. With AI, institutions can, for example, issue more letters of credit and digital trade agreements and better track, report, and fulfill sustainability commitments. 

AI can speed up document processing, compliance checking, and contract approval times. In the future, we may see autonomous supply chains and transaction processing as well as augmented smart contracts with instant settlement, all thanks to AI’s constant evolution.

5. Tokenisation experiments in trade finance 

Although it has been discussed for many years, banks today are increasingly experimenting with tokenisation. Innovations such as smart contracts and stable and risk coins can drive greater efficiencies in trade settlement and post-trade processing, improve risk management, and provide more effective access to capital. With routers, multiple use cases can be created.

However, despite the opportunities, the lack of industry standards remains a challenge. On the other hand, some argue that standards can stifle innovation and therefore should only be established once market connectivity is achieved.  

The event speakers included leaders from Finastra’s Lending business unit, such as Andrew Bateman, Lekshmi Nair, Robert Downs, Anastasia McAlpine, Sandrine Markham, Elena Sankova and Julian Lee. Other speakers represented institutions such as Microsoft, Tech Mahindra, ING, Loan Market Association, ITFA, Crédit Agricole CIB, Norddeutsche Landesbank Girozentrale and CredAble.

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The answer isn’t just about regulation or technology—it’s about human interoperability.

Why does paper still rule trade?

Most efforts to digitise trade focus on machine interoperability—ensuring that platforms, databases, and standards align so that systems can communicate seamlessly. Initiatives like ICC Digital Standards Initiative’s Key Trade Document and Data Elements (KTDDE)and DCSA’s Platform Interoperability (PINT) are crucial steps in this direction.

But trade isn’t just about machines. It’s about people—who need to read, review, and trust the documents they work with. Paper works because it requires no onboarding, no technical training, and no new tools. It is universally understood, freely transferable, and legally accepted across industries and jurisdictions.

For digital trade to replace paper, it must meet the same standard: a document must be as easy for a person to use as it is for a system to process.

Data presentation: The overlooked challenge:

One of the biggest obstacles to digital adoption isn’t only compliance—it’s also how electronic original trade documents are displayed for humans.

While formats like JSON and XML work well for automation, they do not provide a clear, standardised visual representation that people can rely on. Without a human-friendly interface that remains identical across platforms and devices, trust in digital transactions weakens, leading to slower adoption.

This is why the WYSIWYS (What You See Is What You Sign) principle is a favourable option—ensuring that what a person sees and agrees to remains identical for all parties.

Why PDF could bridge the gap

Every document today starts in a digital format before being printed. Instead of reinventing the trade process, the fastest way to digital adoption is to eliminate the unnecessary step of printing and move directly from digital-born to electronic-original documents.

PDF as a format could be the perfect bridge… if used properly. It provides:

• Human readability – A format that looks and feels like traditional documents
• Machine interoperability – Structured data that can be processed digitally. PDF forms, for example, can link structured data to its corresponding visual location in a document-like format – a capability which is not commonly used today and thus often overlooked.
• Legal compliance – A globally accepted format that supports e-signatures and regulatory requirements

To be clear, PDF as it is normally used today does not cut it for electronic trade documents. It’s not enough to scan a signed paper or use one cryptographic hash secured on the blockchain. But PDF does have more potential, and if used with more advanced features, can help simplify the trade digitalisation journey.

Evolution, not revolution

Rather than forcing an immediate shift to full machine interoperability, the best path forward is a gradual transition. It is possible to keep the current process, but make it digital. Here’s how:

1. Start with human interoperability – Create electronic-original documents in the formats businesses already trust.
2. Integrate structured data – Embed machine-readable layers into these documents to enable automation.
3. Adopt full machine interoperability over time – Once human adoption is secured, scale into API-based and fully automated trade processes.

This gradual transition is key. Contemporary document processes have been established for decades, in some cases centuries, and that’s not something that changes overnight. Markets struggle to make massive leaps, but breaking it down makes it much more manageable. Skipping human interoperability and jumping straight to machine-driven trade is unlikely to succeed—because trust and usability must come first.

It will take time for companies to move from step 1 to step 3 — but step 1 alone already delivers tangible benefits and significant improvements over paper-based processes. Digital, human- interoperable documents offer faster execution, better security, and improved traceability. Since most documents are already born digital, the key is simple: skip the paper and move directly to “digital paper.”

The path forward: unlocking true interoperability

Replacing paper in trade is not just about digital efficiency—it’s about balancing technological innovation with human trust. The key to adoption is not forcing businesses into a fully automated future overnight, but enabling them to move at their own pace. The PDF standard, combined with structured data, allows businesses to do just this: making progress, without costly overhauls or complex onboarding.

Instead of pushing businesses toward a digital revolution they aren’t ready for, we must enable an evolution—one where companies transition to electronic trade using the tools they already understand. This way, organisations can unlock immediate gains without disrupting established processes. Then, as readiness grows, structured data and full machine interoperability can follow.

Digital trade will only succeed if people remain at the centre of the transition. It’s time to move beyond just machine interoperability and also prioritise the most crucial piece of the puzzle: human interoperability.

The post The missing piece in digital trade: Why human interoperability matters appeared first on Trade Finance Global.

With more details being released by the US and some countries already releasing significant retaliatory tariffs, a clearer picture is emerging – one of a global economy which will be, at least for a short while, deeply affected by the sweeping tariff regime. Changes and adjustments resulting from this are expected to have far-reaching effects on the global trade industry, diverting trade flows and transforming supply chains. 

When Asian markets opened this morning, it was clear their adjustment to Trump’s tariffs was far from over. Japan’s Nikkei lost 7.8% and China’s main index, the Shanghai composite, lost 7.3%, the biggest fall since the 2020 pandemic. Hong Kong’s Hang Sei index had the biggest one-day drop in 28 years, closing at -13.2%. On the other hand, Asian currencies may see a resurgence as investors move away from the dollar and towards “safe havens” like the Japanese yen, Swiss franc, and Euro, all of which have risen in the past few days. 

Many Asian countries have been among the hardest-hit by Trump’s tariffs, with China subject to a staggering total 54% tariff. The US is by far China’s biggest trading partner, and the recently announced 34% retaliatory tariff is expected to hit US exporters hard when it goes into effect on 10 April. 

The two most important Indian stock indexes fell by around 5% on opening, likely in response to the 26% tariffs imposed by the US. This was in part driven by Tata motors, one of the largest Indian auto companies, which fell by over 10%. Jaguar Land Rover, one of its subsidiaries, was the first major company to announce it would halt shipments of its UK-made cars to the US due to the tariffs levied on the global auto industry. 

Amid fears of a US recession – which analysts like Goldman Sachs are now forecasting with near-certainty if all the tariffs go into effect as announced – oil prices have also dropped to a 4-year low. Brent crude, the benchmail oil marker, has continued its fall started on Friday, now costing $63.49 a barrel compared to last year’s average of about $80. 

European markets, which opened just a few hours ago, are experiencing similar shockwaves. While the UK has been widely seen as avoiding the worst of the tariffs, only being subject to the baseline 10% tariff levied against all countries (even uninhabited Antarctic islands), London’s FTSE 100 lost 4.9%. The German stock exchange fell by 10% when markets opened but has now recovered to just -5.9%, while the French Cac 40 fell by 5.7%.

This is as EU members grapple with high tariffs of 20% as well as a 25% tariff on foreign cars set to go into effect soon, which is expected to affect the already struggling German auto industry. Companies with complex supply chains, like car manufacturers, could see an exponential effect of tariffs, especially if an intermediate step of the manufacturing process happens in the US. 

The agricultural industry, too, could experience significant turbulency, as some of the countries most affected by the tariffs, such as Vietnam and Taiwan, are also among the world’s biggest coffee, cocoa, and crop exporters. This could have a ripple effect both in consumer purchasing power and in global supply chains – for example, strengthening trade between the US and Brazil, another big coffee producer that has been hit less by the tariffs. 

As companies look into diverting their supply chains, smaller players might unexpectedly come at the forefront of global trade. San Marino, a small city-state on the Adriatic coast of Italy, has been eyed as a way for some EU countries to evade US tariffs, which are 20% on the EU but only 10% on San Marino. 

It’s still hard to tell just how much the tariffs will impact the global economy, and how – as seen by the volatile response of markets to the changes. Retaliatory tariffs on the one hand could exacerbate the situation and lead to an all-out global trade war, while negotiation attempts could de-escalate current tensions and lead to a much softer impact on the global economy.

The post Markets react to Liberation Day tariffs as global trade hangs in the balance appeared first on Trade Finance Global.

After months of starts and stops, threats and retreats, Liberation Day is upon us. The Trump administration’s promised wide-ranging regime of tariffs, a cornerstone of his winning presidential campaign, was set for 2 April. Some countries scrambled to negotiate last-minute deals while others are searching for ways to restructure their supply chains – often by moving closer to the US’ s rivals – all in the wake of what is anticipated to be the biggest unilateral tariff escalation since the 1950s Cuban embargo. 

Amidst the confusion and ever-changing policies, the TFG team has compiled a summary of the story thus far and the tariffs as they stand now – updated live every day.

How did we get here?

Throughout the US presidential campaign last year, trade and tariffs have been at the forefront of Republican messaging, forming a core part of Trump’s plan to revive the US economy. While blanket tariffs – of as much as 60% on US rivals like China – were memorably floated during rallies and speeches, more recent declarations by the Trump administration have focused around so-called “reciprocal” tariffs. 

These unilateral import taxes are meant to “make up for” trade barriers that (the President believes) are being unfairly levied against the US, in the form of taxes, subsidies, regulation, and red tape. This seems to suggest that tariffs will vary wildly between countries and even from one industry to the next depending on their importance to US trade and the level of trade barriers. That the tariffs are, at least, in part, targeted towards ending “unfair practices that have been ripping off [the US] for decades” suggests that negotiation is possible, and proposed tariffs may be reduced or lifted if receiving countries make concessions on US exports. 

Tariff timeline

1 February – Trump announces tariffs on Canada and Mexico

In a series of executive orders, Trump imposed a 25% tariff on nearly all goods from Canada and Mexico, scheduled to come into effect on 4 February. Canadian oil and energy imports would have been exempt from this, instead only being taxed at 10%. In the same set of orders, Chinese imports are set to be subject to a 10% tariff on top of currently existing taxes. 

3 February – Trump delays tariffs after retaliation threats

The day before the 25% tariff was set to begin, the Trump administration reached a deal with Canada and Mexico’s leaders to delay them by a month after the two countries threatened strong retaliatory taxes on American exports. 

4 March – Canada and Mexico tariffs really do come into effect

A month after the tariffs were meant to begin, US tariffs against Canada and Mexico came into effect, as did Canada’s retaliatory levies. The White House also announces a doubling of blanket tariffs on Chinese goods, from 10% to 20%, set to start the following day. 

6 March – Trump delays (some) tariffs, again

Just two days after the US–Canada–Mexico tariffs come into effect, the US once again delays tariffs on about half of goods – those covered by the USMCA free trade treaty – by another few weeks. The full set of tariffs are now scheduled to go into effect on 2 April. 

2 April – Liberation Day

Most tariffs on all industries and all areas of the world are expected to be announced, and some even to go into effect, today. This is likely to affect even countries that have already been affected by some tariffs and those who have long-standing trade agreements with the US. It is also the day that the USMCA exemption, which lifted tariffs on many Canadian and Mexican goods, will run out, leaving the US’s two main trading partners facing steep tariffs that may not be delayed again. 

3 April – Auto tariffs

Proposed tariffs specifically targeting passenger cars and trucks from any country, speculated to be as high as 25%, are set to go into effect on 3 April. 

3 May – Deadline for tariffs on auto parts

According to the same executive order that imposed tariffs on cars, a 25% tariff on auto parts will go into effect before 3 May. 

TFG Tariff Tracker

As information about the new tariffs is released throughout the day, the TFG team will keep updating the timeline and publish summaries of which industries and areas are being most affected. 

The post TFG Tariff Tracker: What’s in store for Liberation Day? appeared first on Trade Finance Global.