Economic Buzz: Uncertainty is the new tariff, costing global trade and hurting developing economies says UNCTAD

UN Trade and Development (UNCTAD) has noted that global trade has always faced shocks, from tariffs to pandemics to geopolitical rifts. What is different now is that uncertainty itself has become systemic. No longer tied to one-off events, policy unpredictability is increasingly built into the global economy, reshaping trade flows and slowing investment. The latest Global Trade Update by UNCTAD shows how this climate of uncertainty is raising costs, unsettling financial markets and deepening divides between countries. The World Trade Policy Uncertainty Index reached record levels in the first quarter of 2025, underscoring the growing unpredictability that has become a global feature. Firms face difficult choices: stockpiling goods, rerouting shipments or paying higher transport costs. In early 2025, volatility in US imports increased compared to the previous year, even before tariffs came into force, as companies scrambled to adjust. The cost of uncertainty itself often outweighs the tariff.

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