What could higher tariffs mean for trade finance?

Higher tariffs planned by Donald Trump against China, Mexico and other big trading partners could shake up global trade patterns. But we think trade finance can adapt to a more protectionist global landscape as businesses continue to need financing for domestic and cross-border deals.

Key takeaways

The investable universe for trade finance is expected to grow, even with the dampening effects of protectionist policies as global commerce continues.
History shows that trade finance can withstand the impact of tariffs: evidence from Mr Trump’s first term in office suggests tariffs did not hinder growing finance volumes.
We think a diversified investment strategy without relying too heavily on any single market, transaction type, or sourcing channel can help investors seeking stable, uncorrelated returns.