Rising tariffs, supply chain delays and shifting geopolitical dynamics are changing how WA businesses trade internationally.
The World Trade Organization (WTO) expects global trade to deteriorate due to the United States’ “reciprocal tariff” policy.
The volume of world merchandise trade is precited to decline by 0.2% in 2025, nearly three percentage points lower than what would have been expected without the policy shifts, according to WTO’s Global Trade Outlook and Statistics April 2025 report.
Services trade is also expected to be impacted, now forecast to grow 4% slower than previously predicted.
Whether you're exporting goods or importing materials, understanding and managing international trade risks is key to protecting your margins and building resilience.
Why trade volatility matters for WA businesses
Exported goods and services contribute to 53% of WA’s Gross State Product (in 2023-24) and support one in five jobs. While large exporters in mining and agriculture lead the charge, many SMEs operate in or support global trade – and are equally exposed to its risks.
Changes to global trade policy and tariffs, particularly from major economies like the US and China, are already having flow-on effects.
Some businesses face higher costs and market access barriers, while others are identifying opportunities in newly accessible or underserved markets.
The message is clear: businesses must adapt to an increasingly volatile and politically influenced global trading landscape.
Key risks facing importers and exporters
Geopolitical and tariff risks
Tariffs can change overnight, often driven by global politics rather than trade fundamentals. For example, escalating US tariffs have reduced American exports to China – but also created opportunities for Australian suppliers to fill the gap. On the flip side, some WA exporters are struggling to remain competitive in key markets due to rising costs.
Freight and logistics disruptions
Shipping delays, container shortages and rising freight costs are ongoing challenges. These issues are particularly difficult for businesses moving low-margin or high-volume goods. Disruptions in global freight routes, such as through the Red Sea or US ports, can result in cash flow stress and missed contractual deadlines.
Foreign exchange (FX) volatility
Exchange rate movements can significantly impact your profit margin. The Australian dollar remains volatile against the US dollar, and sudden drops can increase your costs almost overnight. Businesses with international contracts need to actively monitor and manage currency risk.
Contract and compliance risks
Most commercial contracts don’t allow for changes in tariffs or FX rates, leaving businesses exposed to losses. Meanwhile, global customs authorities are increasingly vigilant about country-of-origin claims. Attempting to bypass rules – intentionally or not – can lead to penalties, delayed shipments or reputational damage.
Practical strategies to reduce risk
Diversify your supply chain and markets
Reducing reliance on a single market or supplier can improve your business’ resilience. Many WA businesses are exploring growing markets such as in Southeast Asia and India to spread their risk and tap into new consumer demand.
Understand and use financial safeguards
Financial tools like letters of credit, trade insurance and FX hedging can protect your cashflow and improve payment security. For example, one WA meat exporter used a mix of forward contracts and market-watch orders to manage FX exposure and lock in profitability as their exports to China surged.
Know your rules of origin
If you’re restructuring your supply chain or considering reshoring, understand how changes affect your eligibility under free trade agreements (FTAs). In many cases, you’ll need to meet strict origin rules to maintain preferential tariff treatment – and these can be complex and product-specific.
CCIWA’s International Trade Services team is authorised to issue certificates of origin for exporters to ensure your shipments meet international requirements.
Where to get help
Trade volatility is complex, but you don’t have to navigate it alone. Speak to your bank early about trade finance options, hedging tools and payment protections.
CCIWA’s International Trade team can help you:
- Understand FTAs and country-of-origin requirements
- Access and complete export documentation
- Manage compliance and risk when entering or restructuring global markets
Key takeaway
The global trade environment is full of opportunity but also growing risk. A proactive approach to tariffs, freight, currency and compliance will help your business stay competitive – and ensure you get paid, even in turbulent times.
If you are looking for support or advice in business, investment or trade, contact our experienced International Trade Services team at [email protected].
