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.

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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 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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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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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.

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An automotive parts manufacturer based in the Gumi National Industrial Complex in North Gyeongsang Province, South Korea, filed for court rehabilitation yesterday, on 31 March, after failing to honour promissory notes.

In spite of its £17.3 million annual turnover, and holding innovation certification, the company cited a “sharp decline in order volumes” as the primary cause of its distress.

This case exemplifies broader challenges facing Korean manufacturers, with two automotive parts suppliers in the country declaring bankruptcy in March alone. The sector’s troubles come before US President Donald Trump’s tariffs have fully taken effect – a 25% levy on imported vehicles starts 2 April, with component tariffs following in May.

Manufacturing production had already contracted by 4.2% year-on-year in January, with the Business Survey Index (BSI), which measures the economic sentiment of the top 600 South Korean companies, remaining below the 100-point threshold for thirteen consecutive months. 

The Business Survey Index (BSI), which measures the economic sentiment of the top 600 South Korean companies, is at 92. A BSI below 100 means companies have a negative outlook on the economy. The BSI currently stands at 92, indicating that many businesses are pessimistic about future growth and economic conditions. 

“Exports are expected to fall from April,” said Chun Kyu-yeon, an economist at Hana Securities, as a result of reciprocal tariffs on automobiles. While South Korea’s total March exports increased by 3.1% in March, this fell short of the expected 3.5% growth.

South Korea’s steel exports dropped 10.6% in March, in correlation with the US imposition of a 25% tariff on steel last month.

This extends beyond automotive parts: after Trump unveiled a 25% tariff on automobiles last Wednesday on 26 March, shares in Korean imported vehicles were rattled. Hyundai Motor lost 11.2% in the three sessions following the annonucement, and Kia Corp fell more than 3% after Trump’s announcement. South Korea’s Industry Minister Ahn Duk-geun warned of the “considerable difficulties” this uncertainty would bring.

The stakes are significant: South Korean automotive parts exports to the US reached £6.3 billion last year, representing 36.5% of the nation’s total component exports. South Korea’s exports of automobiles to the United States stood at $34.7 billion in the same period, accounting for 49% of its total auto exports. South Korean brands (Hyundai and Kia) also make up two of the eight top car brands in terms of auto sales in the US. 

The Korean government plans emergency measures for the automotive sector in April, with further initiatives for petrochemicals and component manufacturing to follow.

Industry representatives are calling for subsidies and tax relief comparable to those offered by competitors such as the US and Japan to weather what they describe as an “unprecedented crisis” for key industries.

While a significant share of media attention is diverted towards the rhetoric and ideological implications of tariffs, such cases reiterate that tariffs will harm the businesses – often small and medium-sized enterprises (SMEs) – which make up the foundation of international supply chains. As such, these bankruptcies portend a far weakened structure upon this foundation.

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This comes in anticipation of a flurry of tariffs expected to be released by the US on 2 April. As both companies and countries scramble to plan a response to the tariffs, China may be looking for a way to increase its own resilience and take up some of the US’s declining dominance in global trade. 

The French and Chinese foreign ministers met in Beijing yesterday to discuss deepening cooperation between the two countries, with Chinese foreign minister Wang Yi vowing to “uphold multilateralism [and] oppose unilateralism” in clear opposition to Trump. The officials agreed to strengthen economic relations between France and China by encouraging Chinese investment in France and working together on a range of industries, from agriculture to artificial intelligence. 

This move is especially significant as the EU and China have been involved in a trade spat since October, when the bloc imposed high tariffs on China’s auto industry and China retaliated by taxing European brandy imports, hitting the French cognac industry hard. That the two countries are vowing to increase cooperation and find a solution to the reciprocal tariffs is a significant step, which may in part be in an effort to present a united front to upcoming US-imposed sanctions.  

On the industry side, Xi met with over 40 CEOs and executives from companies around the world including FedEx, AstraZeneca, and Standard Chartered to discuss supply chain resilience and stability. The meeting is ostensibly just a second iteration of an event held at the same time last year with US executives and occurred just a few days after the China Development Forum, China’s most important business summit. However, the backdrop of US sanctions clearly influenced the discussions, which reportedly centred around increasing resilience and cooperation. 

While some governments are scrambling to hold last-minute negotiations to decrease the impact of tariffs, many others are looking for alternative trade partners to diversify their export markets and increase resilience. At the same time, companies – especially those with complex supply chains which may experience an exponential effect from tariffs – will be searching for ways to protect their supply chains and be less reliant on US markets. 

China, which has been grappling with slowing growth and weakening domestic demand, could be hard-hit by the sanctions too – especially with its $800 billion car and EV industry facing high tariffs. China may be looking to place itself as a viable alternative to the US when it comes to restructuring supply chains, courting Western and emerging economies alike.

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This closure has instigated concern surrounding supply chain resilience and risk management, particularly on overdependence on single transit points.

According to Parcelhero, the airport’s closure disrupted the supply of over £5.43 million worth of goods. This includes losses from spoiled perishable goods, aircraft rescheduling costs, idle production lines, and the complex logistics of rerouting freight through alternative airports like Gatwick and Stansted.

Key exported products such as salmon, books, and medicines, along with critical imports like chemicals, plastics, and perishable goods, were significantly impacted by the airport’s closure.

The closure was particularly impactful for European and transatlantic trade, given Heathrow’s crucial role as the UK’s primary international airport.

Cargo companies and logistics providers quickly adapted to the crisis. Some, like PML Seafrigo, offered collection services from alternative airports and worked to reroute goods. Despite the airport reopening, cargo facilities at Heathrow and alternative London airports continued to face significant scheduling and volume challenges in the aftermath of the closure.

In 2024, Heathrow Airport handled 1.5 million tonnes of cargo, valued at £216 billion, which is 70% of all UK cargo.

The event elucidated how vulnerable these crucial supply chains are to gridlock. Heiko Schwarz, Global Supply Chain Risk Advisor at Sphera, said: “Whether it’s this fire, the Icelandic ash cloud in 2010, or the Suez Canal blockage in 2021, these incidents underscore the need for end-to-end visibility, scenario planning, and supply chain diversification.”

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The biannual report described decreased expectations of global GDP growth and rising volatility; policy uncertainty, geopolitical risk, trade barriers, and fragmentation unsurprisingly emerged as the main threats to trade in 2025 and beyond. 

Perhaps the most consequential finding of the report is a revision of past predictions of global GDP growth, which would have seen it slightly rise to 3.3% from 2024’s 3.2% and hold steady in 2026. Due to increased uncertainty and rising trade barriers, growth is instead now projected to slow to 3.1% in 2025 and 3% in the following year. 

This is driven by a significant slowing in US growth, projected to decrease by a full percentage point from its current level in 2026, and similar slowing growth in G20 countries. Developing countries will be the ones driving growth, with India, Indonesia, and Türkiye all rapidly increasing the size of their economies. Slowing growth may help decrease inflation globally, which remains above the targets set by central banks in many countries.

While uncertainty has been increasing worldwide, with consumer confidence hitting 2-year lows in much of the Americas, trade policy uncertainty has increased exponentially in recent months, the report found. This is likely related to President Trump’s tariff plans, which threaten to impose heavy duties on the US’s main trading partners in an effort to boost domestic producers and make trade fairer. 

After a series of false starts, in which tariffs against Mexico and Canada were quickly levied and just as quickly lifted, the Trump administration has promised a sweeping tariff regime to go into effect on 2 April, nicknamed “liberation day”. Mexico and Canada were most affected by the rise in uncertainty; these two countries, as well as the US and Brazil, experienced slowing growth in the past months, mainly driven by the services sector shrinking.

Increased tariffs aren’t just affecting uncertainty. The OECD predicts that tariffs were they to go ahead, will be “a drag on global activity” and “add to trade costs, raising the price of covered imported final goods for consumers and intermediate inputs for businesses”. This effect will be amplified in regions with highly international, integrated supply chains, as the North American market is, potentially multiplying the effect of tariffs and driving unprecedented supply chain transformation. 

On the flip side, the OECD report sees potential for sustained growth if tariffs were removed and technology harnessed to boost productivity. An optimistic prediction of high AI adoption with robotics integration is projected to add over 1.4% to annual labour productivity over 10 years, while a more modest prediction of high integration with adjustment frictions is still expected to add over 0.6%. The report also highlights the importance of encouraging competitiveness in domestic economies, a measure which has consistently gotten better over the past 6 years; the UK has maintained its position as the most competition-friendly of the countries surveyed. 

While the risk of tariffs and a retaliatory regime that might give way to an all-out trade war could be destructive, international cooperation could open the door to rising growth. Diversification, and strengthening supply chains will be a useful stopgap for firms affected by the tariffs and should be encouraged by national policies. However, a sustained effort to reduce fragmentation and multilaterally lower tariffs is the only thing that will bring the global economy back to sustained growth. Geopolitical risk, driven by conflicts in Europe and the Middle East and their effect on trade routes and energy prices, contributes to an undercurrent of volatility and uncertainty; developments in those conflicts or other simmering global conflicts could further contribute to rising or lowering consumer confidence and uncertainty.

The report paints a sobering but potentially optimistic picture for the months ahead. While fragmentation and tariffs are driving uncertainty and slowing growth, technology and cooperation can have a mitigating effect and contribute to higher productivity. 

The first takeaway from the report, then, is that once again, trade and tariffs dominate global economic developments; trade barriers and geopolitical risk can have destructive effects worldwide, but will also be the key to promoting growth. Unlike the global disruption brought on by the pandemic, which seemed like a sweeping, uncontrollable force, or last year’s geopolitical volatility that was hard to contain or predict, 2025’s global challenges are entirely within the international community’s control – as is fixing them. 

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Just weeks after the two countries resumed talks, Nidhi Tripathi, economic minister in India’s High Commission in London, reported on Thursday 20 March that the UK and India are “very close” to agreeing on an FTA. This agreement will bring a degree of stability, as both countries look to reroute around tariffs from key trading partners, in particular the US.

Bilateral trade between the UK and India was valued at £40.9 billion in 2024, an increase of 8.6% from the previous year. In this period, India was the UK’s 11th largest trading partner; the UK was India’s 16th largest trading partner.

The negotiations with New Zealand, while smaller in scale, are equally strategic.

After a decade-long impasse, New Zealand Prime Minister Christopher Luxon launched a five-day diplomatic tour in Delhi and held bilateral talks with Indian Prime Minister Narendra Modi on 16 March.

The two nations have agreed to commence the first round of negotiations next month, with Luxon describing the restart as a “major breakthrough” that could potentially double New Zealand’s exports within a decade. 

Currently, bilateral trade between the two countries stands at under $2 billion, but both sides see significant potential for expansion across multiple sectors. It provides India with enhanced access to agricultural and dairy markets while offering New Zealand improved entry into India’s burgeoning technology and services.

The negotiations, which originally began in 2010 but stalled over market access issues—particularly New Zealand’s desire to enter India’s traditionally protected dairy market—reflect India’s recent shift towards more open bilateral trade agreements, particularly in the context of countering China’s influence in the Indian Ocean region and diversifying its international economic partnerships.

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This comes amidst reports that the Chinese government would be investigating CK Hutchinson’s sale of the two key Panama ports to US investment giant BlackRock, in a deal likely partially motivated by President Trump’s plans to place the crucial waterway back under American control. 

On Tuesday, 18 March, Bloomberg reported that senior Chinese government officials have instructed state agencies, including the State Administration of Market Regulation, China’s main antitrust agency, to study the sale for potential breaches of security or antitrust issues. The deal, announced on 4 March, involves CK Hutchinson, a Hong Kong-based conglomerate, selling controlling stakes in a total of 45 ports in 23 countries, including the Balboa and Cristobal ports, to a group of investors backed by BlackRock. This would make BlackRock the world’s third-largest port operator, giving it control over 10.4% of global container traffic. 

The deal was speculated to have been at least partially due to Trump’s insistence that the Panama Canal go back under US control, which he reiterated during the State of the Union address. While the proposed sale would not give the canal itself back to the US, instead handing over management of two ports at either end of it to an American company, the Trump administration has claimed it as a win.

However, pushback from China and Hong Kong, as well as Panama, whose government needs to approve the sale before it goes ahead, is threatening to jeopardise the deal. A spokesperson for the Chinese foreign ministry commenting on the deal said that “China has always firmly opposed the use of economic coercion, hegemonism and bullying to infringe upon the legitimate rights and interests of other countries,” while John Lee, Hong Kong’s Chief Executive, said on Tuesday that the country opposed “the abusive use of coercion or bullying tactics in international, economic, and trade relations.”

While neither the Chinese nor the Hong Kong governments have explicitly spoken out about the sale and lack an obvious route to stopping it as the buyer and port are outside Chinese territory, oblique statements and the rumoured additional scrutiny on the deal are likely to further delay the sale. 

The Chinese government could intervene with the sale by using antitrust laws that restrict extraterritorial sales with an effect on domestic competition or by designating the sale as having national security implications. While direct action to completely halt the sale is unlikely, recent comments and the reports of an investigation into the deal point to increased government scrutiny and potential pushback. China isn’t alone in disapproving of the deal, with Panama’s president, José Raúl Mulino, saying on 5 March in response to Trump’s comments that the canal “is Panamanian and will continue to be Panamanian.”

China, Hong Kong, and Panama’s pushback against the deal risk disrupting the sale placing a shadow of uncertainty on one of the few global shipping channels that have been until now unaffected by geopolitical tensions and delaying BlackRock’s proposed investments in the ports. In the wider context, this could represent a further trend of resistance to the US’s recent efforts to regain the hegemony of the last century. 

The Trump administration’s attempts to place itself back at the centre of the global political and economic stage through increased tariffs, involvement in major conflicts, and attempts to exert more control on emerging economies have all been met with international pushback. Global trade is one of the industries most affected by this, thanks both to its inherent vulnerability to geopolitical uncertainty and to Trump’s aggressive tariff strategies; that international attention is shifting to crucial shipping channels could put the industry even more on edge, potentially affecting supply chains all over the world. 

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