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A red wave swept over the USA on 5 November 2024 as the Republican Party under former president Donald Trump won the presidential race and claimed a majority in both houses of Congress.

If Trump’s campaign rhetoric is to be believed, then his return to the White House will bring with it a renewed commitment to protectionism, an upheaval of trade norms, and significant implications for economies worldwide. 

To discuss these potential implications and explore how a second Trump presidency will reshape global trade, finance, and geopolitical dynamics, Trade Finance Global spoke with Rebecca Harding, Economist at Rebeccanomics; Robert Besseling, CEO at Pangea Risk; Alisa DiCaprio, former Chief Economist at R3; and Simon Everett, Trade Policy Expert on the day the results were announced.

A rising tide of protectionism and its ripple effects on trade finance

Throughout the 2024 presidential race, Trump campaigned heavily on the promise of putting American workers and industry first by imposing sweeping protectionist tariffs on goods entering the country. 

DiCaprio said, “The first big shift under a second Trump administration is around more restrictive tariffs for everyone. The campaign has suggested 10 to 20% tariffs on all imports, as well as increased enforcement of trade rules. So we’re going to see trade become much more restrictive.”

For some foreign businesses that rely on US markets to sell their products, these campaign promises, should they materialise, will introduce considerable strain on their margins and may require them to rethink their entire approach to global commerce. 

Everett said, “Companies exporting from those countries would be well-advised to consider what alternative plans they have for supplying the US market should trade tensions deteriorate.”

Companies dealing in low-value imports, in particular, will face steep hurdles due to stricter de minimis limits, effectively increasing the costs of doing business with the US.

But it’s also important to remember that just because something was promised on the campaign trail, doesn’t necessarily mean that it will become policy once the new administration takes power. 

DiCaprio said, “Even though the campaign says that there is going to be all these restrictions, Congressional Republicans are likely to moderate his most extreme proposals. Not the direction, but certainly the magnitude. So it remains to be seen exactly how these will play out.”

Harding added, “There’s also an extent to which he won’t necessarily use all of these measures. Some of them, because he’s transactional, will be used as bargaining chips.”

Regardless of what extent the campaign rhetoric materialises into actual policy, Trump’s election has already and will continue to have on the ground implications on how business is conducted in and around the US – including for the trade and supply chain finance industries.  

Supply chain finance may experience an increase in demand as businesses look to reorganise their supply chains and require assistance to cover the capital investment that will entail.

On the trade finance side, demand may be about to decrease. The types of transactions in the US that use instruments like letters of credit are often conducted between an American firm and either one in an emerging economy or a new exporter. These will be the types of businesses most negatively impacted by rising tariffs. 

A battle for control over commodities and currencies

The competition for economic dominance extends beyond trade policies to the critical resources that underpin modern economies. Trump’s election is likely to reshape commodity markets through a renewed focus on fossil fuels, heightened trade fragmentation, and changes to the value and use of the US dollar. 

His administration’s strong support for oil and gas development positions the US to play a more dominant role in global energy markets. Potentially, these resources could be used as leverage in geopolitical negotiations and within commodity markets.

Harding said, “We are seeing trade fragmentation and the separation of the critical mineral supply chains. All of those types of things will affect our transition, and we’re going to see a much more complicated commodities picture in the years ahead.”

By prioritising traditional energy over renewables, the US could alter supply dynamics and create volatility in pricing. At the same time, the fragmentation of global trade, driven by protectionist policies, could disrupt the flow of commodities and force regions to reconfigure their trade networks. This shift may further complicate the movement of critical resources, amplifying uncertainties for businesses and economies worldwide.

And then there is the role of the greenback.

Besseling said, “A stronger US dollar seems to be the outcome of a Trump administration, and that will have an impact in terms of global trade tensions… and may also inflate the borrowing costs for many countries in emerging markets, like in Africa and Asia.” 

Higher borrowing costs amplify existing debt crises, compelling these economies to explore alternatives. That’s why initiatives like BRICS Pay and local currency trade systems are gaining traction as nations look to bypass traditional reliance on the dollar. 

These movements underscore a growing desire among emerging markets to assert greater independence and resilience in an era dominated by economic uncertainty.

Besseling added, “The BRICS Club is expanding. We’ve got more partners across emerging markets now joining the BRICS organization. Similar, we’ve seen these emerging markets seeking alternatives to make trade happen in local currency, pushing ahead with a local currency clearance system called BRICS Clear.”

While much remains to be seen in the world order, it seems that there is at least a growing interest, and now perhaps even need, among the nations of the world to find alternatives to a US-centric system.

—

A second Trump presidency signals a return to protectionist measures and unilateral decision-making. From the restructuring of supply chains to the shifting balance of power in commodity markets, businesses and governments alike must brace for significant change. 

The ripple effects of these policies, should they come to fruition, will test the resilience of existing systems and drive innovation in trade, finance, and geopolitics. 

The post PODCAST | Tariffs, trade wars, and transformation: The next four years of Trump appeared first on Trade Finance Global.

Trade is becoming increasingly weaponised, not only due to sanctions but also through physical retaliatory violence across crucial routes. In this context, banks and financial institutions find themselves at the forefront of a new kind of warfare. 

Dr Rebecca Harding, Managing Director of Rebeccanomics and Co-Chair of the Environment, Social, and Governance (ESG) Board at ITFA, shares her insights on the evolving landscape of trade finance and the critical need for strategic thinking in the face of global uncertainties.

The shifting sands of global trade

Damaging a country’s economy for a military advantage is no new tactic. During the Second World War, for instance, Germany adopted submarine warfare: sinking transport ships carrying supplies for the war effort. In response, the Allied ‘oil campaign’ targeted Germany’s oil and petroleum reserves in strategic bombings.

But in recent years, economic warfare has been much more coerced than physical warfare, and it reverberates beyond warring nations across the world. 

Harding explains, “We’re seeing an acceleration of that sense of deep uncertainty. Increased use of sanctions, increased use of export controls, increased use of economic levers for coercion, for influence, and all of those things by governments.”

According to Harding, the trigger for this shift is the Russia-Ukraine conflict. “What’s different is that we have actively used sanctions and export controls to deter a country and also as a means of defence,” she said, since NATO is hesitant to turn to arms.

Banks are tanks

In this new landscape, the role of banks has transformed. They are no longer mere implementers of government policies. 

“Banks aren’t foot soldiers anymore,” Harding explains. “Banks are tanks. They’re actually the weapons themselves, and they don’t realise that.”

This shift requires banks to take a more strategic overview of global events, especially in the trade finance space. They need to understand how they might be used as instruments in economic warfare and develop stronger lines of communication with governments.

Economic war games: New approaches to trade and risk management

The polarisation of the global economy has significant implications for trade, receivables, and supply chain finance. For Harding, an organisation must constantly asking itself questions and holding itself accountable.

“Where are the risks with digital? Do we know what our supply chains are? Do we know what our risks of cyber attack are? Do we know where all of our supply chains are, and of their transparency? Do we have any idea what’s going on at tier three or tier four?”

The sanctions landscape changes every six to eight weeks – sometimes even more frequently. This has created a markedly complex and volatile regulatory environment.

Harding emphasises, “We’re talking about investing in Africa. We’re talking about sustainability. All of those things are also being weaponised… It’s actually very, very, volatile and quite scary at the moment.”

In a similar way, financial institutions must constantly ask themselves hypothetical questions. Harding introduces the concept of economic war gaming as a tool, rather than merely a response. Such exercises can help organisations anticipate potential geopolitical and economic scenarios, assess their impact on trade and finance, and develop strategies to mitigate risks – preemptively. 

“We need to do that in economics as well,” Harding argues. “What happens if China suddenly launches a central bank digital currency? Or what happens if there’s a huge climate event that allows ships to sail through the Arctic Circle, where Russia has primacy?”

The need for strategic thinking

The need for comprehensive and 360-degree reviews of economic risks, considering existential geopolitics, are essential for businesses to survive unprecedented crises. Yet, Harding has noticed, 

Despite the clear need for comprehensive risk planning, Harding notes a concerning trend: “Over four events where I’ve asked that question [whether businesses include scenario modelling as part of their risk planning], not one single audience has had the majority of people put their hands up.”

She urges banks and businesses to adopt a more strategic approach to risk management in trade finance. When exploring and developing risk mitigation strategies, if there’s one place to be looking, it’s in the intersection – between geopolitical, economic, and environmental factors.

Harding proposes, “Let’s think about them strategically. Let’s war game them.

“Let’s think about what the worst, in a military sense, could happen, because that way it makes our own industry resilient.”

—

As the global trade landscape continues to evolve, banks and financial institutions must adapt their approach to risk management. The message is clear: hope for the best, but prepare for the worst. 

Considering economic war gaming when deciding strategy is the only way to remain an active participant rather than a pawn in someone else’s war game. 

The post VIDEO | From foot soldiers to tanks: Are economic war games the new normal for trade finance? appeared first on Trade Finance Global.

Bilateral trade between the UK and China is worth $95bn. (2019). A 5.4% increase on 2018 and an annualised growth rate of 1.6% increase from 2015. According to the Global Investment Tracker, China’s recorded investments in the UK have been around $87.2bn over the last 15 years, mostly in energy, real estate and finance.

The UK’s biggest exports to China (2019 figures) in USD are:

1. Precious metals ($8.7bn)
2. Oil and gas ($5.8bn
3. Cars and automotives ($3.8bn)
4. Machinery and components ($2.3bn)
5. Optical and medical equipment ($1.2bn)
6. Pharma ($1.96bn)
7. Electrical products ($927m)
8. Copper/copper products ($396m)
9. Plastics ($344m)
10. Whisky ($264m)

Rebecca Harding, CEO, Coriolis Technologies says: 

“Within five years, we’ve moved from a golden era of Sino-British relations to a significant deterioration that may have an economic and jobs impact in the UK. The language used by China’s Ambassador to the UK, spoke of ‘damage, punish and enemies’. If things do continue upon this trajectory, then there may be ramifications for UK trade.

“Car exports have been significant in the past ten years. Between 2012 and 2015 alone, growth went from near zero to over 25%. China loves the Mini in particular. While it isn’t the biggest sector, Scottish Whisky is a sensitive export too. It has been growing at an annualised rate of over 30% for the last five years. It may be unlikely that China would apply direct tariffs, it may send a message to Scottish distillers and US bourbon makers, if the Chinese begin to buy Japanese varieties instead.”

“There is a lot riding on this, most notably Huawei and various UK nuclear energy programmes. What may go under the radar are smaller companies that form parts of longer supply chains that could bear the front of a new era of frosty relations.”

The post China and UK: what could a Chinese trade and economic backlash look like? appeared first on Trade Finance Global.

“We do not have an indication yet to what UK trade figures will look like  following Covid-19 as there is normally is a time gap in collating this data. However, the global economy has shut down and as a consequence, so has global trade. 

“If we want to see what it may look like, then we are better off looking at shipping data. Around 80% of the world’s trade is carried by sea and since the beginning of the year there were over 430 so-called “blank sailings”, where shipping lines cancelled their journey. This number is expected to increase into May and for comparison, it’s now nearly twice the level that it was during the financial crisis over a shorter period of time. In other words, the numbers in the coming months will not look pretty. 

“The World Trade Organisation (WTO) projects a fall of 32% in world trade. For recent historical context, during the financial crisis, the UK’s exports fell back by five per cent more than the rest of the world. 

“There are a handful of levers that government can pull to support exporting businesses from providing employment support to more targeted measures such as trade credit and keep supply chains open, the policy should be about how can we support exporters, not the politics of who we are doing business with. 

“Looking ahead, there are a lot of structural changes we should anticipate in response to Covid-19. Businesses are already beginning to move away single suppliers, particularly those who work using the ‘just-in-time’ inventory system. I would expect that the role of China as the world’s supplier will change and we will governments and business begin to use more local supply chains or ‘reshore’ industries such as manufacturing. 
“Politically, it will be tough for the UK. On the horizon, the US election will only stoke the tensions between it and China. We have seen multilateral organisations weakening as major powers look to flex their muscles. I cannot see in the current climate, how the UK can be influential, when competing against several powers, who all have their own strategic interests.”

The post UK ONS Trade Figures Released: Commentary on Global Trade Impact appeared first on Trade Finance Global.

“This trade deal is entirely political and leaves around $380bn of tariffs in place. In an election year, President Trump can present this as a win for US manufacturers and producers. He also retains leverage on China in any future trade deals that might be negotiated. Issues around China’s Intellectual Property “theft” and its security risk to the US economy have been kicked into a subsequent agreement which is unlikely to be signed before the US Presidential election.

“Throughout the process, the US has increasingly moderated its tone. We have gone from “trade wars are quick and easy to win” at the end of 2017, to “this is going to take time” in 2019 to “the deal will take place in stages”. What this approach does is create a PR event for Trump – he has signed a deal with China – but kicks the detail into the long grass after the election in terms of a deal while taking a strategic and covert approach behind the scenes through deals with allies and sanctions on tech.

“Interestingly, the US Commerce department has also threatened to impose more sanctions on Huawei today. This is troubling because again, it shows that the detail of the deal on security is now being dealt with by the US by other means than through the trade agreement itself. It is unclear how this will pan out in terms of the impact on US or indeed EU companies, but it does lend weight to the potential for a separation between East and West in terms of technology.”

The post Dr Rebecca Harding: ‘Trade deal is a PR win for Trump with security questions unanswered’ appeared first on Trade Finance Global.

The transformational power of data has brought to bear a new era of analytics, and with it has come a revolution in the way we eat, work, travel, and socialise. But when it comes to global trade – which underpins every aspect of our day-to-day lives – we still can’t reliably answer the question of “Who trades what with whom?”. This is an inexcusable state of affairs in today’s world of big data, artificial intelligence and machine learning, as Dr Rebecca Harding, CEO of Coriolis Technologies, explains.

By analysing just a small sliver of the around 2.5 quintillion bytes of data created by everything from mobile phones to smart city infrastructure and credit cards every day, businesses and governments can quantify and gain actionable insights on everything from shopping habits to healthcare, public transportation and education – in real time.

Not so for global trade. Policymakers and companies alike currently find themselves trying to make sense of lagged and fragmented data points in order to glean a bigger picture, which means they are in danger of making decisions without a reliable evidence base.

This situation would be bad enough in a benign international trading environment. When taken against the current backdrop of a global trade war and a populism-driven shift away from multilateralism, however, its rectification becomes an urgent necessity. 

If trade institutions are changing, then politicians, negotiators and businesses alike need accurate and timely data in order to be able to assess the impact of, for example, higher tariffs, greater non-tariff barriers, regulatory changes and the reconfiguration of trade agreements. This requires accurate, timely and consistent data that can cater for the complexities of global supply chains across multiple borders and multiple components. 

Nowhere is this clearer than in the United Kingdom as it prepares to leave the European Union. The UK government’s EU Exit: Long-term economic analysis research paper, upon which parliament will base its assumptions on the long-term economic and fiscal impact of the country’s exit from the 28-member bloc, relies upon data from the Global Trade Analysis Project (GTAP), one of the most widely used computable general equilibrium models internationally for trade analysis. So far, so good. However, the GTAP data, which looks at bilateral trade flows through costs, distance, production and consumption patterns, was last updated in May 2015 – over a year before the Brexit vote took place.

The risks associated with developing policy impact assessments based on four-year-old data are glaringly obvious. 

Lagged data isn’t the only issue. Gaps and discrepancies abound across all publicly available datasets. For example, Germany reports twice the amount of service exports to the UK as the UK says it imports from Germany according to TradeMap, which uses United Nations service trade data. This is similarly the case for France and Italy. This suggests that the UK may be miscalculating the size of its trade surplus in services – which is worrying, given that trade in services represents 48% of all trade in the UK. 

The UK is far from alone in suffering from inadequate trade data. Japan, for instance, says it imports 21% more from China than China says it exports to Japan. Kenya, meanwhile, has not reported any trade data at all since 2013.  

The accepted methodology for dealing with this has been variously developed between the OECD and the World Bank, taking one country’s exports in relation to another country’s imports in order to yield a divergent, but potentially more reliable picture of the trade flow itself. But the gaps remain despite improvements in trade data collection techniques and tightening reporting standards, as countries report in different sector codes, in different currencies and at different times. This leaves both the public and the private sector to fill in the blanks and hope for the best when trying to predict the future of trade. 

In today’s age of information, however, models no longer need to make assumptions about how the world looks. They can instead be based on real time data. Using AI mirroring techniques on a multi-dimensional basis – a system that must handle more than 3TB of data at any one point in time – Coriolis Technologies ensures that not only are trade flows between countries equal, but so too are trade flows between countries and their partners by sector or product. For goods, this approach yields a difference between what is published in publicly available data and the cleaned and harmonised data of a relatively consistent 11-12% of world trade since 1996. In other words, there is 11-12% more trade happening than what has been captured by the patchy, inconsistent data the world is using at present. 

The tools are now available to answer the question: “Who trades what with whom?”. Putting them to use will transform how policy is formulated, how the impact of the changing trade landscape is assessed, and how trade is financed by banks. The imperative for harnessing data in trade has never been stronger, and a failure to do so will have dramatic consequences.

About Coriolis Technologies

Coriolis Technologies is the world’s leading source of data and analytics in the trade and trade finance space. 

Coriolis Technologies’ mission is to harness the power of world-class data in order to address broken trade and the broken politics and finance that goes with it. 

With leading-edge technological solutions and an experienced team of economics, risk, finance, strategy and investment professionals, Coriolis Technologies turns billions of unconnected datapoints into accurate insight, analysis and solutions for exporters, policymakers, investors, banks, analysts and governments around the world. 

The post Fixing global trade’s data problem appeared first on Trade Finance Global.

Rebecca Harding discusses the elusive hidden trade and how it relates to anti-money laundering initiatives and the challenges they bring for banks.

AML and KYC have become a central pillar of bank trade finance decision making. A whole industry has built up around them to advise on how to avoid risks, how to check every client, large or small and how to increase supply chain transparency. FinTech startups are becoming RegTech start-ups as new technology based solutions seek to capture a share of the $100bn that banks spend on compliance. The RegTech sector looks likely to grow by 25% annualised to reach a value of $7,208m by 2023.

What is the reason for this? Perhaps the best answer comes from a banker themselves: ‘The problem is not what we know – it is what we don’t know.’ Since 2012 nearly $20bn in fines has been imposed on banks for fraud and non-compliance and much of this has arisen because the banks themselves have simply not known how to predict the AML risks in the supply chains of their clients. There are sophisticated checks for sanctions, credit risk and AML, but these are limited by virtue of the fact that, by definition, they are historical. As a result, any reaction is too late by the time it is implemented.

The problem rests in trade itself. Some US $2.1tn of trade at any one point in time is hidden in the trade flow itself. Some countries produce lagged or no data, either for exports or for imports. But mirroring the flow from the partner’s perspective means that a much fuller picture of trade can be derived. Unsurprisingly, countries in emerging markets, and particularly Africa have data that is as high as 200% higher using this approach.  But equally, big financial centres also have high divergence between what they report about their own trade and what other countries report about their trade with them. Luxembourg, Switzerland, and Ireland all report significantly less trade than actually takes place.

Areas not elsewhere specified account for 5% of world trade. Commodities not elsewhere specified, are some 6.5% of world trade. So what are ‘Areas not elsewhere specified’? This partner is perfectly legitimate and, according to the United Nations, consists of all those countries that are too small or too unreliable to have proper reporting mechanisms. Similarly Commodities not elsewhere specified are goods that have not been classified for tax purposes – a general bucket that could include anything.

More than this, supply chains are increasingly more complex and digitised. There are no precise measures for the size of this market meaning that neither the regulators nor the banks know the risks.

In the end, the issue for the compliance function within banks is to manage what is not known at present and mitigate the risks that are inherent in future trade as it becomes more complex. However, this is more complex than simply avoiding smaller riskier deals in countries which are known to have higher levels of fraud, crime, or terrorism. Risk mitigation is also more than a good insurance policy to ensure that fines can be paid without damage to the overall balance sheet when they are imposed. These strategies will simply perpetuate the post-financial crisis perception that banks are part of the problem.

Rather, banks and trade finance professionals need to understand the fact that the best place to hide a stolen car is in a car park; the best place to hide fraud, crime, or sanctions avoidance is in legitimate, if vague trade. By introducing systems to understand global trade flows and the predictive power of flows in dual use goods as well as in commodities not elsewhere specified, there is a greater likelihood that they will also address the core AML challenge: what they don’t know.

The post Hidden trade and anti-money laundering – the challenge for banks appeared first on Trade Finance Global.

Coriolis CEO and author of ‘The Weaponization of Trade’ Dr. Rebecca Harding discusses the US-China trade war and the new standards that it is bringing to trade.

The world is focused on the current trade war between China and the US. Some $620bn in goods trade alone is at stake and there is a real danger of escalation. Because of the consequences of current US policy towards Chinese technology and its perceived intellectual property abuses, there is also a risk of this turning into a foreign relations crisis. Some pundits are already calling this the new Cold War as a US-style internet and a Chinese style internet are developed, and separated by, of course, the Great Firewall of China.

It is hard to under-state the importance of this battle between the two largest economies in the world. It is a conflict of economic systems as well. Trade being used as a weapon in what is actually a struggle for influence and coercive power.

The US has long complained of unfairness in trade, and trade finance, terms. It points at governments who support their businesses to export through richly funded Export Credit Agencies. US EXIM of course is among the biggest, but the current US administration believes in a free market with less rather than more intervention from the state. As a result of this the EXIM charter renewal has not yet been confirmed leaving it supporting businesses that are looking for funding of less than $10m a year. As one of the aerospace businesses at this year’s EXIM event asked, “In a world where trade is being weaponised, why would we deliberately disarm?”

What is important here is the fact that the US is itself catalysing the process of change in the global trading system. The approach certainly divides opinion: on one hand are those who say this is the end of multilateralism and is a dangerous moment in history; at the other end of the spectrum are those who say the unchecked rise of China has been going on for too long and damaged US interests. Few would disagree, however, that the rules of trade do not reflect the way in which trade itself has evolved since the financial crisis and that they should reflect the role of trade that is not measured in formal statistics.

There are two areas where the world of finance will be changed by all of this. First, the role of the dollar as the global trade currency may weaken – not because the US economy is intrinsically weaker, but because US companies who want to do deals along the Belt and Road, or with Iran will have to find alternative currencies to do that in. There is already evidence that Belt and Road projects are being priced in Renminbi, for example. Second, the EU has aimed to provide an alternative, special purpose vehicle, to enable trade between European businesses and Iran. This is a legitimate institutional response to a financial problem but take up is at present low with banks in particular arguing that it is still too risky to breach sanctions imposed by the US; the decision by Google to end its business with Huawei is a business response to the same thing:  the US placing a market price effectively on business relations with “the enemy”.

So whether you agree with the means or not, the US is re-defining trade policy around the world. What is fascinating is that the US negotiating stance, whether it is towards China, Japan, the EU or the UK is identical: eliminate the trade imbalance if there is one, promote US agriculture and manufacturing business, protect US intellectual property from overseas influence and make sure that there is no currency manipulation by the central bank to make exports more competitive. Like their business counterparts, the challenge will be for national governments to decide on the value they place on their control over trade and monetary policy over commercial and foreign relations with the US. This is the new normal of trade.

The post Dr Rebecca Harding: The New Normal of Trade appeared first on Trade Finance Global.

It is fair to say that these are challenging times for global trade. New technology, digitisation, in trade and trade finance, the rise of FinTech, greater local content requirements, tighter compliance and regulatory requirements and a slowing global economy are putting downward pressure on volumes and values of trade and making it difficult for exporters, finance providers and insurers alike to think carefully about how their trade relations are configured.

And then there’s the politics. For the last two years, politics has disproportionately impacted trade and the institutions that support it globally. The use of trade as strategic tool for political and foreign policy influence is now established as a phenomenon dominating the discourse between countries; the rhetoric around trade relations increasingly weaponised. The World Trade Organisation is weakened and the world’s trade practitioners start to grapple with the creeping bilateralism that this environment has engendered.

Sometimes it is useful just to look at the facts of trade – it helps dial down the noise. Nowhere is this clearer than in the trade relationship between China and the UK. China’s goods exports to the UK were worth some $58bn in 2018, and UK goods exports to China around $20bn. Much of this trade is in research intensive sectors like electronics and pharmaceuticals. The services trade has blossomed and amounted to $9bn in total in 2018, a rate of growth in combined imports and exports of nearly 7%. Financial services represent nearly 7% of this: the UK will export an estimated $441.5bn in financial services to China, and China will export some $53bn.

Trade and trade finance are key. The value of the trade finance market between the two countries, including services, is around $77bn. Some $27bn of that is bank intermediated trade finance and $43bn open account trading.

Yet the landscape of trade is shifting and China and the UK alike should benefit from this transition. More trade is shifting to the services and digital space, and trade finance is being transformed through the advances in digitisation, artificial intelligence, and big data. There is a global funding gap in trade of $1.5tn for the SME community. As trade changes there are more opportunities for SMEs in this space; there are also more opportunities for FinTech businesses to help banks with speeding up and streamlining their due diligence, compliance, payments and transactions systems to help the banking community globally service this market.

Fintech and Trade

More than this, the FinTech market has shifted. Three years ago, it was thought that FinTech would disrupt the banking sector. As the sector has developed, however, its role as a disruptor has changed: increasingly FinTechs work with banks to build collaborative networks where there is space for everyone to grow and compete globally. During the year to come, new imperatives will emerge in the UK: Data as a Service, and Analytics as a Service will embed themselves as key drivers underpinning strategy and market development for banks.

According to the UK’s Innovate Finance, the UK has the fastest growing FinTech market in the world. UK FinTech businesses are at the leading edge of collaboration with the UK banking sector, which itself is evolving into a powerful driver of FinTech research and development. Rather than being disintermediated, banks are enabled by the partnerships that are emerging. China’s technology sector is also growing rapidly and the scope for learning between the two nations is substantial.

Trade, technology and innovation will not be held back by protectionism or bilateralism. While there are many challenges in the current global environment for trade, many of the political challenges still remain just that – political. It is high time for trade practitioners to state the case for global trade and global innovation. With it they must stress the need for a multilateral approach to the way in which we solve the problems of inequality, climate change, financial inclusion and economic development through trade.

Want to find out more?

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The post Why China and the UK’s Trade Partnership Matters – Dr Rebecca Harding appeared first on Trade Finance Global.