UNCTAD GLOBAL TRADE UPDATE: TRADE POLICY UNCERTAINTY LOOMS OVER GLOBAL MARKETS
As trade flows become increasingly unstable, UNCTAD has highlighted policy uncertainty, rather than tariffs, as the deeper disruptor to global trade. In its Global Trade Update of September 2025, the organisation warns that systemic unpredictability is emerging as a structural threat, eroding trust between partners and destabilising global markets.
The report observes that developing countries and least developed countries are disproportionately exposed to volatility. While developed economies showed relatively stable trade flows in early 2025, least developed countries experienced more intense disruptions in the second quarter, reflecting a delayed but sharper impact of policy shifts.
One of the striking findings is that uncertainty alone can disrupt markets. Swings in US imports began before tariffs were even implemented, suggesting that the mere anticipation of policy change unsettles trade flows. Once tariffs were imposed, volatility subsided as companies adapted, indicating that clarity, even when restrictive, is less damaging than ambiguity.
According to UNCTAD, unpredictability is weakening rule-based systems and undermining international cooperation. The report urges governments to provide advance notice of policy changes, to base decisions on transparent and data-driven analysis, and to strengthen dispute settlement mechanisms. It also stresses the importance of export market diversification and greater international coordination to restore stability.
UNCTAD concludes that the capacity of global trade to support sustainable growth will increasingly depend on restoring predictability and trust in international policy frameworks.
Read the full UNCTAD report here.