Executive Summary

Mithridatism: after the trade recession, exporters are more optimistic in 2024 but also more concerned with (and also more used to?) geopolitical risks, shortages of inputs and labor and financing and non-payment risks. For the third edition of our Trade Survey, we asked over 3,000 companies in China, France, Germany, Italy, Poland, Spain, the UK and the US about their outlook for global trade in the year ahead. This year, 82% of the companies surveyed said they expected business turnover generated through exports to increase. Serendipitously last year, 70% of corporates expected turnover growth and the year ended up with a trade recession, reminding us of the conquering nature of exporters, as well as the negative year-on-year commodity price effect on export revenue worldwide. This year the good news is that (i) nearly 40% expect a significant increase of more than +5% in 2024 (twice as much as last year) and (ii) 80% of respondents expect export prices to continue to rise in 2024. Our overall forecasts are quite conservative: we expect global trade to increase by +2.8% in value terms, below the long-term average of 5%, reflecting the risk of disruptions in global shipping like the Red Sea crisis, as well as the many trade wars looming on the horizon of the super electoral year. This year, risks related to politics and protectionism come up as the top risk by companies in our survey overall (at 73%). Furthermore, exporters still seem concerned with the shadow of supply-chain disruptions (31% of respondents ranked transport risks among their top three risks and 28% included the risk of input shortages) and financing (20%) and non-payment risks (17%) also feature high among this year’s top risks . Nearly 55% of companies already have to wait more than 50 days to get paid and nearly 40% of exporters expect non-payment risk to rise in 2024, broadly stable compared to last year. Concerns related to transport risk and high energy prices have significantly declined from 2023, except for German exporters.

Selective globalization: one in two companies is considering relocating supply chains due to increasing geopolitical concerns. Will they walk the talk?The political landscape, with elections taking place in economies that account for close to 60% of global GDP, is contributing to rising geopolitical risks and increasing uncertainties. In this context, companies are in wait-and-see mode, mostly focused on upcoming national elections rather than the global political landscape, including the US elections in November.Current electoral pledges suggest that US tariffs could triple in the event of a second Trump presidency. Yet, only 27% of companies in our survey say that the US elections could pose a risk to their supply chains in the coming year or two. Moreover, 53% of respondents say they are considering relocating parts of their supply chain due to increasing geopolitical risks but fewer are actually taking concrete steps in this direction: relocating production sites does not rank among the top three out of 10 actions proposed to mitigate supply-chain disruption (except for Spanish and German exporters). Interestingly, even fewer US companies (40%) consider relocating parts of their supply chain due to increasing geopolitical risks, with sovereignty concerns and subsidies likely to be bigger motivations.

Three-body problem: there is no evidence of a full decoupling from China yet. More than one-third of respondents plan to increase their footprint in China, while only 11% plan to decrease it. On the other hand, Chinese companies considering relocating sites or change suppliers mostly favor staying within the same region. However, there are signs of diversification: Around one-quarter of German, French and US firms see their footprint in China representing a smaller share of their global supply-chain investments going forward, preferring Asia-Pacific (especially ASEAN countries) and Western Europe. 48% of US exporters that have production sites or suppliers in China would consider countries in Asia-Pacific or Latin America to diversify their supply chains. Relocating within the same region and nearshoring seem to be the preferred trends. Only 5% of respondents expect reshoring trends to reverse in the coming two years, while more than 26% expect it to accelerate.

Tragedy of the horizons 2.0: companies are preparing to tap the potential of AI to transform trade, but progress on greening trade is painfully slow. Companies in Poland and China are heavily banking on AI: 79% of Polish exporters and 81% of Chinese ones mentioned an AI application as the most impactful digital tool on their international development, compared to about 60% in other countries. Yet, despite strong sustainability concerns and the crucial role of global trade in accelerating the green transition, there is still a long way to go: Nearly two out of three of respondents indicated that their companies would reduce CO2 emissions by only a meagre 1-5% in 2024, which will not be enough to reach net-zero emissions by 2050.