The State of Global Trade Finance: Rebound or Restructuring?

Global trade finance in 2025 stands at a critical crossroads—poised between recovery and reinvention. While early signs of a rebound are emerging amid easing credit conditions and rapid digital adoption, structural shifts in trade corridors, geopolitical alignments, and sustainability imperatives are driving a deeper transformation. The question for financiers, corporates, and policymakers alike is whether today’s recovery represents a short-term bounce or a fundamental reconfiguration of how global trade operates.

Trade Volume Trends and Global Outlook

After several challenging years marked by pandemic disruptions, inflationary pressures, and monetary tightening, global trade in 2025 is experiencing a mixed narrative. According to the World Trade Organization (WTO), global trade volumes are expected to contract slightly—by 0.2%—reflecting persistent supply chain bottlenecks, tariff volatility, and geopolitical frictions between major economies.

However, the medium-term outlook is notably more positive. TASConnect’s 2025 Trade Finance Report forecasts a 3% rise in trade volumes in the second half of the year as central banks relax monetary policy and global growth accelerates to 3.3%, up from 2.9% in 2024.

This divergence—short-term softness amid long-term optimism—points to an uneven recovery across regions. Asia, for example, is expected to lead with export growth of 7.4%, buoyed by regional trade agreements, manufacturing diversification, and resilient demand from emerging markets. In contrast, Western economies are facing a slower revival as protectionism, rising costs, and regulatory shifts weigh on export competitiveness.

The takeaway is clear: while the macro indicators suggest an approaching rebound, the structure and geography of global trade are being permanently reshaped.

Restructuring through Regionalisation

At the heart of this transformation lies the reconfiguration of global supply chains. The traditional model—anchored around a China-centric manufacturing ecosystem—is giving way to a more distributed, regionalised framework. Companies are embracing “China Plus One” or “China Plus Two” strategies, expanding production into Southeast Asia, India, Mexico, and parts of Eastern Europe to reduce dependence on any single hub.

This regionalisation trend is reinforced by trade blocs and partnerships such as the Regional Comprehensive Economic Partnership (RCEP) in Asia and growing interregional alliances in Africa and Latin America. Together, these developments signal a decisive pivot towards self-reliance and strategic diversification.

Moreover, nearshoring and friend-shoring—the relocation of supply chains closer to consumer markets or allied nations—have increased by 8–10 percentage points over the past three years. The implications for trade finance are profound: cross-border transactions are becoming more regional, requiring tailored financing instruments, local currency solutions, and enhanced risk assessment frameworks that can adapt to multi-market exposures.

In essence, trade finance is no longer about bridging a single global system—it’s about connecting a web of interconnected regional economies.

Digitalisation and AI Redefining Trade Finance

Perhaps the most visible driver of resilience and renewal in trade finance is technology. The post-pandemic acceleration of digital trade platforms, AI integration, and blockchain adoption has revolutionised how transactions are executed and financed.

AI-powered platforms are now enabling real-time transaction monitoring, automated credit scoring, and enhanced fraud detection, reducing manual errors and operational delays. Low-code, AI-driven systems—projected to constitute 70% of all new trade finance platforms in 2025—are democratising access to financing, particularly for small and mid-sized enterprises (SMEs) that previously struggled with documentation burdens and credit constraints.

Simultaneously, blockchain-based smart contracts are improving transparency and interoperability across global value chains, allowing banks and corporates to validate trade documentation within seconds rather than days.

The International Chamber of Commerce (ICC) is also stepping in to standardise the responsible use of AI in trade finance, focusing on areas such as document verification, fraud prevention, and data governance. This effort aims to ensure digital transformation is not only efficient but also trusted, inclusive, and sustainable.

The result is a more agile, data-driven trade finance ecosystem—one where speed, security, and scalability define competitiveness.

ESG Transition and Policy Divergence

Even as trade finance modernises technologically, it faces mounting pressure to evolve ethically. The integration of Environmental, Social, and Governance (ESG) standards has moved from optional to essential, reshaping how exporters, financiers, and investors evaluate cross-border activities.

However, 2025 has also brought a degree of policy divergence. Europe and parts of Asia continue to expand their green financing frameworks and carbon reporting requirements, while the US and UK are showing signs of regulatory deceleration amid political and economic recalibration.

Despite this divergence, sustainability remains a competitive necessity. Corporates that embed ESG principles into trade operations are not only securing preferential financing terms but also enhancing supply chain resilience. For instance, Microsoft and IKEA have reported 10–30% emissions reductions across their supply chains through green procurement and carbon optimisation initiatives.

In trade finance, ESG-linked instruments—such as green letters of credit, sustainability-linked guarantees, and carbon-adjusted pricing mechanisms—are becoming mainstream. This signals that sustainability is now woven into the financial fabric of global trade rather than existing as a parallel agenda.

Financing Landscape and Alternative Models

The evolving structure of global trade is also transforming the financing landscape itself. Traditional trade finance, historically dominated by large banks and institutional lenders, is being complemented—and in some cases, challenged—by alternative financing (AF) mechanisms.

Platforms offering peer-to-peer lending, equity crowdfunding, and invoice financing are unlocking liquidity for businesses in emerging markets, where conventional banking access remains limited. According to market forecasts, the AF sector is expected to grow at a compound annual growth rate (CAGR) of 21.1% between 2025 and 2028.

This growth is especially significant for SMEs, which account for over 80% of global trade participants but face chronic financing gaps estimated at USD 2.5 trillion annually. By leveraging fintech platforms and tokenised assets, SMEs are gaining faster access to working capital, enabling them to scale operations and integrate into global value chains.

With interest rates easing and digital adoption accelerating, these alternative models could be the catalyst that transforms trade finance from a specialised service into a universally accessible ecosystem.

Rebound or Restructuring?

The evidence suggests that global trade finance in 2025 is experiencing both a rebound and a restructuring. While cyclical recovery—fuelled by credit easing and digital growth—supports short-term optimism, the underlying forces of regionalisation, sustainability, and technological transformation are redefining the industry’s long-term trajectory.

Trade finance is no longer simply about bridging buyers and sellers across borders; it is about building resilient ecosystems that balance efficiency, inclusivity, and sustainability. Institutions that recognise this shift—and align strategies accordingly—will shape the next era of global commerce.

Global Banking & Markets (GBM)

At Global Banking & Markets (GBM), we understand that today’s trade finance landscape demands more than capital—it demands connectivity, insight, and collaboration.

GBM provides an integrated events and networking infrastructure that brings together banks, corporates, investors, regulators, and technology leaders to facilitate meaningful dialogue and cross-border dealmaking.

Through our platforms, summits, and bespoke networking forums, GBM enables decision-makers to navigate complexity, identify partnerships, and unlock new trade and financing opportunities across Asia, the Middle East, Africa, and Europe.

In a world where trade finance is being reshaped by digital transformation and regional realignment, GBM stands as the bridge between opportunity and execution—helping institutions not just adapt to change, but lead it.