HSBC’s latest ‘state of trade’ report underlines just how difficult trading globally has become. The bank’s analysts note that although global trade ended 2025 on a strong footing, UNCTAD estimates that Strait of Hormuz disruptions could see world goods trade growth slow from 4.7% in 2025 to as little as 1.5% this year amid weaker global demand and greater uncertainty.
Similarly, the WTO says sustained high oil prices could shave half a percentage point off its 1.9% goods trade growth forecast for this year, while its services trade growth forecast of 4.8% could fall to 4.1% due to the impact of the conflict on international travel.
A survey of UK firms published by Barclays in April found that rising energy costs, supply chain disruption and ongoing geopolitical uncertainty linked to the Middle East conflict were already impacting the majority of UK businesses.
Two-thirds reported experiencing energy and fuel cost pressures, while shipping and logistics costs were also weighing on margins. According to survey respondents, access to finance is playing a central role in supporting business resilience with support for international trade becoming increasingly important.
Marco Schuchmann, Treasury Director at scientific instruments manufacturer Bruker acknowledges that his business has been exposed to price volatility as a result of tariff disputes and geopolitical developments.
“In some instances, our raw material cost is priced into the end customer invoice – especially for niobium and copper – but for all other materials we are exposed and we actually see pressures on our margins,” he explains. “For the high tech instruments, we can increase prices but for the lower level instruments that is a bit more tricky.”
When asked whether Bruker has had to make changes to its supply chain to ensure access to the materials it needs, Schuchmann notes that it has entered into long-term supply agreements which mean that for the next two years it has fixed the forecasted volumes.
“In terms of the key elements in a successful application for trade finance in the current market environment, we see a shift on the banking side that it is more difficult to extend lines of credit and also the banks experience pressure – especially on instruments that are dated five years out or are even open ended,” he says. “It also seems that the service is only offered by banks that provide other services to the customer and not as standalone business.”
Jordan Trafford is VP of Engineering at CellBlock, which develops fire prevention and containment solutions for lithium-ion battery fires and other class-D hazardous goods. He says that from an order fulfilment perspective, the company has seen raw materials lead times and logistics nearly double as a result of uncertainty around tariffs and recent geopolitical events, while capital challenges have been exacerbated by what he describes as extended and inflexible payment terms dictated by Fortune 500 companies.
Prior to engaging with working capital platform Klear, CellBlock used an accounts receivable letter of credit through its local bank.
“Unfortunately, this only constrained us further because it was too limited for our needs,” he explains. “Due to some internal hurdles, implementing the platform took longer than expected but the team made the transition seamless, driving us to improve our production planning and take a deeper look into our cash flow forecasting.”
Klear CEO, Chris Hale, says demand is being driven by a shift in how industrial companies are managing their capital; companies finding that their existing credit lines and legacy systems aren’t dynamic enough; and the desire to remove capital friction.
As trade becomes more regional, more policy-driven and less predictable, companies are redesigning supply chains, diversifying suppliers and holding more working capital in-region, all of which lifts the need for flexible trade finance and working capital solutions suggests Chad Wallace, EVP Global Transaction Banking at Scotiabank.
“With supplier transitions happening more frequently and financing cycles compressing, clients are also looking for faster, more data-informed execution to stay resilient through tariff adjustments and disruption risk,” he says.
We see a shift on the banking side that it is more difficult to extend lines of credit and also the banks experience pressure.
Marco Schuchmann, Treasury Director, Bruker
Wallace adds that access to trade finance and effective execution tend to be most challenging in higher friction jurisdictions or within more complex supply chains.
“One example is a technology company that faced tariff pressures and heightened geopolitical risks, prompting a reassessment of its sourcing arrangements,” he explains. “To reduce risk and improve resilience, the company shifted part of its supply chain to suppliers closer to home. However, this created working capital pressures as new supplier relationships often involve stricter payment expectations.”
Where supply chains are being re-routed, diversified or regionalised, importers and exporters often need additional support around liquidity, risk mitigation and visibility into the movement of goods and payments.
“That can translate into stronger demand for solutions such as letters of credit, supply chain finance and other structured trade-related financing arrangements,” says Joon Kim, Global Head of Trade Finance and Cash Management Platform at BNY, adding that access to trade finance can be more challenging in sectors where transaction structures are more complex, counterparty risk is higher or market volatility is elevated.
“More broadly, sectors exposed to rapid regulatory change, sanctions sensitivity or sharp swings in input prices can face tighter financing conditions at certain points in the cycle.”
According to Enrique Rico, Global Head of Trade and Working Capital Solutions at Santander CIB, tariff disputes and armed conflicts are increasingly embedded in corporate planning, forcing companies to diversify suppliers, regionalise production, reassess trade corridors and protect liquidity against longer and less predictable cash conversion cycles.
He explains that access is typically more challenging for businesses with a combination of earnings volatility, long production or shipping cycles, concentrated counterparties, heavy commodity exposure, complex jurisdictions and/or heightened compliance sensitivity.
“In practice, that pressure is often most visible in natural resources and commodity-linked chains, metals and mining, energy-related flows, import dependent industrials and selected parts of consumer goods and technology where critical inputs are concentrated and inventory has become strategic,” says Rico.
Sectors associated with the AI data centre capex boom, defence, energy security and critical minerals are in need of working capital to support significant investments and strategic growth plans.
That is the view of Natasha Condon, Global Head of Trade Sales at J.P. Morgan Payments, who refers to geopolitical conflicts that impact trade corridors having an effect on the global economy, creating financial stress in countries that are dependent on imports of energy and its byproducts, such as fertiliser and helium.
“When credit is constrained, it is usually smaller companies and smaller countries that experience the most impact,” she says.
MUFG has observed companies across various industries including energy, chemicals and trading seeking larger and longer‑tenor trade finance limits as shipping routes lengthen and input costs rise, states Head of Transaction Banking for APAC, Belinda Han.
“Access has become more selective, particularly for mid‑sized and smaller players in sectors exposed to limited insurance coverage and geopolitical hotspots,” she adds, noting that companies are increasingly seeking structured solutions for elevated inventory positions, especially where vessel rerouting has increased lead times. During supply chain transitions, many companies are also holding buffer inventory while onboarding new suppliers.
In the commodity trade finance business, Evgeniya Sharkova, Head of Trade Finance Sales, Raiffeisen Bank International is seeing a natural increase in average transaction sizes, largely reflecting the rise in underlying commodity prices.
“In general, access to trade finance services is not determined by industry but by a customer’s financial profile,” she continues. “Naturally, large, well‑established corporates tend to have better access than SMEs. The main exception applies to sensitive industries that are restricted under banks’ internal policies. For example, many European banks apply a restrictive policy toward thermal coal.”
With supplier transitions happening more frequently and financing cycles compressing, clients are also looking for faster, more data-informed execution to stay resilient through tariff adjustments and disruption risk.
Chad Wallace, EVP Global Transaction Banking, Scotiabank
According to Dominique Honoré, Global Head of Global Trade & Commodities at Crédit Agricole CIB, demand for trade finance instruments remains high. Rerouted supply chains have driven up the need for trade finance instruments such as letters of credit or payment guarantees while shifts in regional risk appetite have created opportunities.
“In addition, there has been a structural reshoring shift as corporates look to provide a more ‘local-for-local’ approach in key regions affected by geopolitical disputes, particularly in Europe, North America and China/Asia,” she says. “This shift is creating new relationships in localised value chains, boosting demand for trade finance instruments as well as ECA-backed capex financing solutions for export driven or critical industries.”
Honoré agrees that pro-cyclical industries with long production cycles face more challenges (requiring large capex amounts and long tenors) than those that require shorter exposure or less volatile repayment schedules.
“Issues that could restrict access to trade finance include cash flow volatility, sensitivity to weather, regulatory complexity and environmental concerns that could affect credit ratings or cash flow generation,” she explains. “Industries that face quick swings in demand could also have difficulty accessing trade finance.”
One of the recent discussion points in the financing space has been the extent to which corporates are taking a closer look at inventory finance as part of a wider shift toward boosting supply chain resilience.
“We are assessing whether consignment stock or an inventory financing programme would be beneficial to us,” says Schuchmann. “We have spent a significant amount of time talking to banks and an interested service provider.”
Charles Hardaker, Global Head of Lending at Ebury refers to a noticeable uptick in demand for inventory finance as businesses hold higher levels of stock to protect against supply chain disruption and delays.
“Heightened risk – whether political, currency-related or logistical – means companies are more focused on protecting cash flow and mitigating uncertainty,” he says. “Trade finance is increasingly being used not just to facilitate transactions, but as a tool to manage volatility and maintain resilience in a more complex trading environment.”
An issue that is receiving less attention is the banking derisking story. Farah Lotia, Managing Director, Product & Quantitative Strategy at Ripple Treasury observes that geopolitical tensions have caused banks to exit certain corridors, particularly across the Middle East and parts of Africa and South-East Asia.
“That financing gap has not disappeared, but it is being filled differently,” she says. “Regulated stablecoin settlement rails are increasingly active in corridors where traditional correspondent banking has pulled back. Earlier this year, several major European banking institutions representing over US$3trn in combined assets moved cross-border payment infrastructure onto blockchain rails, which is a signal that this is no longer experimental.”
From a treasury management perspective, Lotia suggest corporates are now managing FX exposure and financing structure simultaneously in ways they weren’t three years ago and that hedging and trade finance decisions are no longer separate conversations.
As for specific industries for which access to trade finance is challenging, she also references critical minerals and the energy transition supply chain where trade corridors are relatively new, counterparties are often in jurisdictions with limited correspondent banking infrastructure and commodity price volatility makes collateral valuations unstable.
