Wide-Ranging Trade Issues Confront Global Businesses on Multiple Fronts

Global business leaders highlight risks linked to trade as some of their top concerns — both physical and financial. While the topic is complex and broad, there are opportunities that business leaders can pursue to stay ahead of emerging trade dynamics.

Key Takeaways

Trade remains under attack on a variety of interconnected fronts, with geopolitical concerns still a top focus area for businesses in 2025 — and likely to remain a pressing issue.
Opportunities, however, exist despite growing uncertainties, including a stronger global M&A outlook.
Businesses can prepare for future volatility by using a variety of risk transfer solutions to mitigate trade risks.

Trade is the lifeblood of the global economy. But due to its breadth and scope, it unsurprisingly faces several significant challenges — often interconnected and mutually reinforcing — including geopolitical instability, increasing economic tensions, inflation, climate change, currency fluctuations and people availability. Together, these create a complex and volatile global trade landscape for business leaders to navigate.

Trade Trends: Today and Tomorrow

All of the top 10 risks identified by business leaders in Aon’s latest Global Risk Management Survey have implications for global trade, with six directly linked:

Business interruption
Economic slowdown/slow recovery
Supply chain or distribution failure
Commodity price risk/scarcity of materials
Damage to reputation/brand
Increasing competition

Movement of Goods and Commodities

Geopolitical instability remains a top concern for businesses. The increasing threat of fragmented societies and protectionism is of growing concern globally.¹ Trade between geopolitically distant economies accounts for nearly 20 percent of global goods trade, but close to 40 percent of trade in globally concentrated products.²

“Geopolitical issues remain the primary issue in our global supply chain,” says Global Risk Consulting Leader Richard Waterer. “They’re reshaping trade channels, resulting in less availability of certain products and commodities. This causes price increases and is central to significant global tension.”

Uncertainty around the scope and scale of tariffs is high, contributing to added global trade tensions.³ The potential impact of intensifying global trade wars weighs heavily on business leaders with tensions between the U.S., China and the EU among the top geopolitical challenges in 2025.⁴

Meanwhile, climate obligations are an increasing focus for businesses moving goods and commodities globally. Maritime regulation introduced in 2020 requires ship owners and operators to decrease sulfur emissions by 85 percent. New cleaner fuel can be over 25 percent more expensive, representing a direct financial impact on businesses’ bottom lines.⁵ The combination of new regulations and heightened stakeholder scrutiny has the potential to create new reputational exposures and financial impacts — issues that are expected to deepen as companies look to tackle the climate crisis.

"The intersection of supply chain and reputational risks poses a unique potential threat to both an organization’s profitability and brand equity,” says Ladd Muzzy, Global Reputation Risk practice leader. “Quantifying the financial reputation exposure has been a keystone to better supply chain and business decisions.”

An Outlook on Movement of Goods and Commodities

Supply chain risk is complex, multi-faceted and costly, with disruptions significantly impacting both business and financial performance.

Looking ahead, organizations need to consider enterprise risks associated with their supplier location strategy, including political risk and terrorism, corruption and bribery, and risks related to weak legal and regulatory controls.

Geopolitical risks will remain a significant concern for international business, especially where they are reliant on supply chains with exposures to volatile regions and sea lanes.

“Geopolitical tensions and an increasingly tense and fragmented geopolitical landscape are top concerns for global businesses because they represent a potential source of vulnerability to supply chain disruption risks,” says John Minor, Structured Credit & Political Risk practice leader. “Escalating trade wars, with the potential to lead to trade restrictions, sanctions and counter-sanctions, have the potential to complicate supply chains for many clients.”

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Currency exchange fluctuations, inflation, near-shoring, climate issues and the availability of qualified people are all interconnected and impacting trade right now.

Lee Meyrick

Co-Lead, Global Specialties and CEO of Global Marine Practice

M&A Dynamics

In addition to the movement of goods and commodities, the role of mergers and acquisitions (M&A) is significant in shaping the landscape for global trade. Deal flows continue to accelerate as demand increases and capital comes back into play, according to Aon’s 2025 Deal Market View. Following the U.S. elections, expectations are widespread that M&A activity will increase, however, questions remain on how potential tariffs and trade wars will impact the market.⁶

According to Aon’s Global Risk Management Survey, dealmakers and risk managers consider the top five financial risks to be:

Cash flow or liquidity risk
Capital availability
Interest rate fluctuations
Asset price volatility
Business interruption

Each risk intersects, amplifying the threats financiers face.

All things considered, M&A momentum is demonstrating remarkable resilience to today’s macro pressures, according to Aon’s The ABCs of Private Equity M&A report. In a survey of senior executives from corporate development teams and private equity firms, most respondents expect deal activity to increase in the next 12 months.

Specifically, more than 60 percent expect a strong or moderate rise, driven by improving market conditions and capital availability. After several years of a challenging regulatory environment for M&A, regulatory agencies are widely expected to be more receptive to combinations that meet the required statutory factors, as well as reducing burdens for new entrants. Reducing burdens and a more predictable review process will likely result in shorter deal timelines, which in turn, can increase deal activity.

“Macro factors were indeed squeezing clients and creating headwinds for M&A,” says Gary Blitz, CEO for M&A and Transaction Solutions. “But over the last more than 12 months, we've been seeing the market rebound as the volatility coming from those factors subsides. Moreover, anticipated tax legislation is in the U.S. and trade uncertainties do not yet appear to be insurmountable headwinds.”

This should bode well for broader trade dynamics. M&A is being further bolstered by sellers having more options to achieve exits through IPOs and corporate sales; however, secondaries continue to provide a vehicle for liquidity. The accelerated M&A activity is supported by significant dry powder at financial sponsors and a backlog of companies ready for sale.

In Aon’s ABCs of Private Equity M&A report, 44 percent of respondents predicted sales to corporates over the next 12 months as the largest volume of company sales.⁷ These buyers are seen as reliable and willing to pay a premium for acquisitions. Secondaries closely followed, with 32 percent favoring this increasingly popular method of realizing liquidity. Secondaries offer a reliable alternative in times of market volatility and macroeconomic uncertainty.

An Outlook on Financial Trade M&A

Global growth is projected at 3.3 percent in both 2025 and 2026, below the historical average of 3.7 percent, according to the World Economic Outlook.⁸ Inflation is also falling faster than expected in most regions — down to 5.8 percent in 2024 and predicted to reach 4.2 percent in 2025 and 3.5 percent in 2026. The likelihood of a hard economic landing is receding, and risks to global growth are broadly balanced.

As such, the key word in M&A — and trade more broadly — is stability, which the global economy appears to be delivering to dealmakers in 2025.

The world is returning to one where dealmakers are more confident in pursuing deals, knowing that the ground under them will not turn to quicksand the following day.

Gary Blitz

CEO, M&A and Transaction Solutions, Global

To prepare, executives should embrace deeper due diligence efforts across key risk areas, including cyber security and workforce optimization. Where initial reviews can give a broad sense of the risks facing a transaction, in-depth due diligence is necessary to delve into the broad spectrum of potential liabilities facing a deal, which include operational capabilities, compliance, sustainability and inconsistencies in supply chains.⁹ They should also develop a robust risk transfer strategy that leverages transaction insurance capital to de-risk transactions.

Despite evolving risks, deals are providing opportunities to invest in digital and sustainability capabilities, which are helping to bolster dealmaking prospects in several sectors, including telecommunications and digital technologies, industrials and chemicals and renewable energies.

How Businesses Can Prepare for Change

There are three opportunities businesses need to consider when navigating global trade risks.

Opportunity 1

Build a Singular Supply Chain Strategy

Building visibility into the supply chain is the cornerstone of mitigating risk. A single strategy for supply chain risk is about a single version of the truth — a taxonomy of supply chain issues that the firm agrees they face consistently and, most importantly, a singular understanding of possible outcomes.

Harnessing data and analytics to build transparency around your most important suppliers, their geographic location and their dependency on third parties will be critical as risks evolve. Awareness of the costs of supply chain failures will help leaders take proactive steps to invest in mitigating existing risks and their potential impact.

“From a risk strategy point of view, it starts with an understanding of where the risk is in the supply chain and quantifying it,” says Waterer. “If you have a picture of your top risks and an understanding of your level of exposure, that will frame the decisions that you want to make as an organization, informing an appropriate balance of risk and reward.”

Related Capabilities

Opportunity 2

Leverage Data and Analytics

While the economic outlook can impact when and how businesses exercise their capital, whether through internal investments — such as risk management — or external transactions — such as M&A activities — data and analytics will remain the bedrock of better decisions. We have seen this help in three scenarios:

The company already has information on its supply chain. It hopes to revisit its insurance program to see what kind of coverage is in place and if it can cover the losses the company may incur due to an interruption from a third-party supplier.
The company is uncomfortable accepting its current level of risk and wants to enhance risk management. Data and analytics can support the assessment of supplier risk and the auditing of supplier risk management. This includes understanding levels of supplier utilization and determining fallback positions in the event of an interruption. This type of analysis helps companies decide whether they need to adjust their supply chain risk management, like identifying a dual source supplier.
The company has recognized that the risk exposure is significant. Therefore, they address it in the supply chain strategy by bringing production closer, changing suppliers, assessing deal sourcing, inventory management or holding more stock.

“Supply chain risk management should be truly enterprise-wide, connecting risk and insurance professionals with senior directors in supply chain, procurement, treasury, strategy and operations, around a common set of data and decision making,” says Derrick Oracki, managing director and actuary in Aon’s Global Risk Consulting practice.

Opportunity 3

Use Insurance Risk Transfer

Specialist solutions are critical in helping organizations navigate volatility and mitigate the risks inherent in trade through supply chain risk management. They can also help facilitate the pursuit of complex M&A transactions. Data-driven insights allow leaders to make informed decisions about material risks and how to address potential exposures.

“Our insurance markets are adept at accepting risk transfer of known and unknown risks, including tax and contingent risks and breaches of reps and warranties, which allows a more economically efficient structure to protect a buyer and a cleaner exit for a seller,” adds Blitz.

In response, supply chains may shorten as more businesses consider the use of nearshoring as an operational strategy to overcome evolving supply chain risks. Data will be central to decision making. Improved insights around where and how risk impacts the supply chain can help inform business leaders as they prepare for unplanned events and volatile supplier performance.

Aon's Capabilities:

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Risk Analytics
Every global business is navigating an increasingly complex and volatile trade landscape, making it harder to grow and maintain operational resilience.

Risk analytics allow organizations to identify emerging challenges and new opportunities for transformation.

Aon’s risk management and risk financing teams use analytics to give leaders and risk managers the insights they need to make better decisions on managing the total cost of risk and implementing effective trade risk mitigation strategies via tools that include:
- Captive feasibility studies
- Claims analytics
- Collateral review
- Cyber risk modeling
- Industry loss rate benchmarking
- Loss reserving and forecasting
- Reputational risk modeling
- Risk appetite modeling and retention analysis
- Risk diagnostics tools like CyQu and Spectrum
- Risk transfer program design, stress testing and funding
Crisis Management
In today’s volatile environment, organizations must navigate an increasing number of interconnected risks while making decisions that impact their customers, employees and balance sheets.

Aon’s Global Crisis Solutions team helps businesses prepare for crisis events by providing consultative risk mitigation and placement strategies. This, combined with crisis response expertise, helps enhance clients’ ability to prepare for, navigate and respond to a crisis, while minimizing organizational disruption and damage.

Aon addresses risk in the following areas, providing local guidance where appropriate:
- Political risk and structured trade credit
- Supply chain disruption risks
- Product recall and product contamination
- Terrorism and political violence
- Kidnap and ransom
- Contingency
- Media and entertainment
M&A
Change is in the air for M&A dealmakers. Volatility driven by macroeconomic, regulatory and geopolitical headwinds — among others — is beginning to subside, giving the M&A market cause for future optimism.

As the M&A market gains momentum, dealmakers will need specialist partners who understand their goals and bring robust knowledge of deal sourcing, transaction processes, risk management and investment strategies to the table.

Aon provides specialist solutions and capabilities across the entire deal lifecycle to deliver optimal deal and business outcomes:
- Transaction solutions, including: representations & warranties/warranty & indemnity insurance, tax insurance, litigation insurance, credit and surety solutions and contingent risk solutions
- Enhanced due diligence
- Understand and unlock intellectual property value
- Cyber risk management
- People, rewards, change and communication
- Portfolio and capital strategy
Trade Credit Solutions
Businesses are facing myriad economic challenges as new forms of volatility impede business operations and change consumer and employee expectations:
- Rising investment risks
- Changes in buyer behavior
- Evolving regulatory requirements
- Ensuring financial strength
- Shifting trade dynamics
- Securing new growth areas
Leaders can secure an edge over competitors by leveraging comprehensive credit solutions. Using a triple-pronged approach of credit insurance, political risk insurance and surety services, Aon can help businesses unlock capital while developing sustainable growth strategies.

Aon’s Thought Leaders

Lee Meyrick

Co-Lead, Global Specialties and CEO of Global Marine Practice
Gary Blitz

CEO, M&A and Transaction Solutions, Global
Richard Waterer

Chief Executive Officer, Global Risk Consulting
John Minor

Director of Crisis Management and Political Risk
Derrick Oracki

Managing director and actuary, Global Risk Consulting Practice
Kelsey Owen

Partner of Talent Solutions, North America

¹ Global Risks 2025: A world of growing divisions, WEF
² Geopolitics and the geometry of global trade, McKinsey
³ Threat and Uncertainty of US Tariffs Both Pose Risks to Mexico, Fitch Ratings
⁴ As 2025 Begins, CEOs are Most Worried About a Trade War and Recession, The Conference Board
⁵ How can fuel insurance support companies’ transition to cleaner fuels?
⁶ Mergers and Acquisitions – What Awaits in 2025?, Harvard Law School Forum on Corporate Governance
⁷ ABCs of Private Equity M&A Report, Aon
⁸ Global Growth: Divergent and Uncertain, WEO
⁹ 2025 Deal Market View, Aon

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