2025 has barely begun, and yet the global trade landscape is already shifting dramatically. From Washington to Beijing, foreign policies are changing, alliances are being tested, and industries are bracing for impact. For MSMEs looking to expand internationally, these shifts present both risks and opportunities. New tariffs, trade barriers, and tensions between allies could make global trade more complex, while tech advancements and evolving supply chains may provide strategic advantages.
In this blog, we’ll break down the most pressing global trade trends of 2025 and what they mean for your business—helping you navigate uncertainty and seize new opportunities.
Trend #1: The US Tech Boom
In a bold move that underscores the US’s continued dominance in the global tech landscape, Apple has announced plans to invest more than $500 billion in the US over the next four years. This massive investment is set to create 20,000 new jobs, primarily in cutting-edge sectors like research and development, software engineering, and artificial intelligence. This announcement comes on the heels of former President Trump’s call for more companies to manufacture domestically, aiming to make US-based production more competitive and attractive. With tech giants like Apple leading the charge, this could signal a larger trend of multinational corporations shifting their operations to the US, strengthening its position as the world’s tech superpower.
For global MSMEs, this shift presents both challenges and opportunities. On one hand, the increased demand for high-tech products could lead to leaner global supply chains, prompting businesses to rethink their sourcing strategies. MSMEs supplying parts and materials to the tech sector may need to explore new supply chain models or consider closer partnerships with US-based manufacturers or nearshoring with suppliers in neighboring countries to meet the demand. On the other hand, the rise in domestic manufacturing creates fertile ground for growth. As US tech companies ramp up production, there will be an increase in the demand for complementary products and services, providing valuable opportunities for MSMEs to gain a foothold in this growing ecosystem.
Trend #2: Shifts in U.S. Foreign Policy and European Defense Dynamics
Since Trump’s return to office, there has been a significant reversal of many of the foreign policies that characterized the Biden administration, most notably the US stance on the Russia-Ukraine conflict. While Biden had firmly supported Ukraine’s war effort, Trump has shifted priorities, aiming to end the conflict swiftly. His administration has initiated peace talks between Russia and Ukraine, excluding Ukraine from the discussions. This shift in US foreign policy has created ripples across Europe, introducing a level of uncertainty in both the political and economic spheres.
For MSMEs with operations or expansion plans in European markets, the repercussions could be far-reaching. The shift in US foreign policy risks disrupting existing trade agreements, which may affect the smooth flow of goods and services, particularly for smaller businesses reliant on consistent cross-border trade. As Trump urges European countries to take a more autonomous approach to defense, nations are being pushed to significantly ramp up their defense spending. Analysts suggest that European defense budgets may need to rise to 3.5% of GDP—an increase of €250 billion annually.
This surge in defense expenditure could divert critical resources from other sectors, including those that support startups and non-critical industries. For businesses operating in Europe, this presents a double-edged sword: heightened uncertainty could result in fluctuating demand, disrupted supply chains, and increased volatility in currency exchange rates. For MSMEs dependent on a predictable trade environment, this shift could pose challenges to the stability and sustainability of their international operations. As Europe pivots towards remilitarization, MSMEs expanding into or operating within the region must brace for potential market disruptions and adapt to an increasingly unpredictable economic landscape.
Trend #3: Post-Conflict Uncertainty in the Middle East
While the recent ceasefire between Israel and Gaza has temporarily eased tensions, the future of Gaza’s governance and its economic landscape remains uncertain. This ongoing instability continues to affect trade routes and investment opportunities in the broader Middle East region. For instance, during the conflict, Houthi rebels frequently targeted shipping vessels traveling through the Red Sea and the Gulf of Aden, disrupting the flow of goods worth over $1 trillion. As a result, container traffic through the Red Sea plunged by 90%, leading many shipping companies to reroute their vessels around the Cape of Good Hope. This detour added an extra 1-2 weeks of travel time and incurred roughly $1 million in additional fuel costs per voyage.
Such disruptions have caused shipping costs and supply chain expenses to skyrocket. Container rates from Shanghai to Europe, for example, surged by 256%. Although a ceasefire has been established, many shipping companies remain wary of traveling through these routes, leading to continued delays and uncertainties.
For MSMEs, particularly those reliant on international imports, the ripple effects of these disruptions could be severe. The increased travel times and costs significantly impact profitability, while delayed shipments may jeopardize production timelines and customer satisfaction. Additionally, the volatile political climate in the region could discourage foreign direct investment, leaving MSMEs operating in or looking to enter the Middle East with limited financial support or strategic partnerships.
Trend #4: China’s EV Disruption
China’s rapid expansion in the global electric vehicle (EV) market is reshaping the automotive industry, challenging long-established manufacturers. With ultra-affordable models from brands like BYD and Wuling, Chinese EVs are undercutting competitors on price, forcing a wave of strategic adjustments across the sector.
For context, a Wuling EV starts at just $4,500, while a BYD model begins at $13,000—a stark contrast to the $30,000 price tag of a Toyota Corolla Hybrid or the $40,000 starting price for a Tesla Model 3. This price disparity has put enormous pressure on global automakers, with Tesla slashing prices by up to 20% in some markets to stay competitive. The impact is especially pronounced in emerging economies, where affordability drives consumer decisions.
For MSMEs, this shift presents both opportunities and threats. Local automotive businesses may struggle to compete on price, pushing them to either lower costs, pivot toward premium offerings, or focus on service-based revenue streams such as after-market modifications and repairs. However, for MSMEs involved in EV component manufacturing—particularly in lithium batteries, charging infrastructure, and software integration—China’s relentless EV production offers a lucrative entry point into high-growth supply chains.
Conclusion
As 2025 unfolds, MSMEs looking to expand internationally must remain agile in the face of shifting foreign policies, geopolitical tensions, and industry disruptions. The resurgence of U.S. manufacturing, evolving European defense strategies, instability in the Middle East, and China’s growing dominance in the EV market are reshaping global commerce in real time.
While these trends introduce challenges—such as disrupted supply chains, fluctuating market demand, and evolving trade regulations—they also create opportunities for businesses that can adapt strategically. MSMEs that stay informed, diversify their supply chains, and leverage emerging market shifts will be better positioned to not only mitigate risks but also capitalize on new growth avenues.
