Global Trade Last Week – Ridiculous but Real
Global trade has never looked more like a rollercoaster: a strange mix of tech-fuelled optimism, geopolitical chess moves, and tariff headaches. Last week is no exception. From the WTO’s bold claims that AI could transform the world economy, to China and the U.S. sparring over chips, to the EU finally sealing a deal with Indonesia after nearly a decade of haggling—trade headlines are swinging between the ridiculous and the real. For SMEs and export advisors, the challenge isn’t just keeping up, but knowing which twists will hit their shipments, margins, and compliance requirements next.
1. AI: The WTO’s New Favourite Trade Superpower
- The WTO claims AI could boost global trade by 34–37% and raise global GDP by 12–13% by 2040 – if infrastructure and policies line up.
- But here’s the catch: without digital infrastructure, poorer economies risk being left further behind.
2. China vs. U.S. – Chips & Trade Talks
- China has launched probes into U.S. chip exports, accusing them of discrimination and dumping.
- This happens just before major U.S.–China trade talks in Madrid. Drama level: high.
3. EU–Indonesia Deal: Tariff Freedom for 80% of Exports
- After nine years of wrangling, the EU and Indonesia have finalised a trade deal (CEPA), to be signed September 23, 2025.
- Roughly 80% of Indonesia’s exports (nickel, copper, palm oil, footwear, textiles) will see zero tariffs within 1–2 years.
- Caveat: It’s not everything, it’s not instant, and it still needs ratification by the EU Parliament.
4. Tariff Chaos – The New Normal
- The WTO says tariffs are causing “unprecedented disruption” to trade rules. MFN (most‑favoured nation) trade coverage has dropped from ~80% to ~72%.
- UNCTAD warns policy uncertainty itself is acting like a tariff, raising costs across shipping, insurance, and investment.
5. India: Fighting Back With Export Support
- India is drafting an Export Promotion Mission worth ₹25,000 crore to shield SMEs from tariff shocks.
- Reason: new U.S. “reciprocal tariffs” have hit India hard, especially on energy-linked trade.
Fact Checks in Brief
Claim | Verdict | Notes |
AI will raise trade by ~37% and GDP by ~13% | True (conditional) | Real WTO report but depends on bridging digital gaps. |
China launched chip probes | True | Confirmed by Reuters. |
EU–Indonesia: zero tariffs immediately | Partly true | ~80% of exports, phased in over 1–2 years, ratification pending. |
India shield against tariffs | True | Export Promotion Mission is in planning stage. |
Weekly What to Watch (SMEs & Export Advisors)
1. Tariff Timing & Shipments
- Expect sudden tariff reviews, especially U.S./EU. Build in logistics buffers and explore alternate ports/routes.
2. Digital Trade Rules
- SMEs in e‑commerce, agri‑traceability, or fintech should prep for stricter compliance. Export advisors: map client exposure to new AI/digital standards.
3. Indonesia Deal = Template for Future
- EU will likely use this “resources + ESG standards” model elsewhere. Clients should prepare for certification and sustainability demands.
4. Policy Volatility = Hidden Costs
- SMEs: price in uncertainty. Advisors: push trade credit insurance, hedging, and flexible FX contracts.
5. Friendshoring Opportunities
- Trade blocs (ASEAN, Mercosur, AU–EU) are opening faster than the U.S. or China for some goods. Secondary markets may be easier entry points.
Bottom Line
Global trade right now is a messy mash‑up of tariffs, AI optimism, and bloc deals. SMEs can’t control the chaos – but with early intelligence on tariffs, compliance, and market openings, they can stay ahead of the storm.