Global growth faces headwinds as trade tensions and geopolitics bite

A new MeritBey analysis warns that a mix of trade-policy moves, regional conflicts and commodity market shifts could significantly depress global growth in 2025, rattling corporate supply chains and raising costs for manufacturers and consumers.

MeritBey’s report models scenarios in which higher tariffs—including recently announced measures on major trading partners—compound existing geopolitical strains to cut global growth by roughly 0.8% in 2025 (with an intensified scenario showing a larger hit into 2026). The study flags the automotive and electronics sectors as the most exposed, noting that tariffs and disrupted component flows could sharply raise consumer prices and reduce demand for laptops, consoles and mobile devices.

Shipping and logistics are another pressure point. MeritBey highlights growing risks to key sea routes such as the Red Sea and Strait of Hormuz, where regional tensions and attacks have already prompted carriers to reroute or avoid passages. At the same time, new environmental rules that force shipping firms to buy emissions allowances are likely to push freight costs higher, working through to higher import and production costs for companies that rely on containerized trade.

On commodities, MeritBey expects oil markets to remain oversupplied on current trajectories, with analysts’ central estimates pointing to a mid-$70s average for Brent in 2025—yet warns that sanctions or sudden supply shocks could still trigger short-term spikes. Natural gas outlooks diverge regionally: European prices are forecast to ease if winters normalize and LNG flows expand, while US prices may bid higher on export demand. Metals markets are set to feel the strain of weak industrial demand and evolving EV supply chains, with copper and nickel facing downside risks amid growing inventories.

To navigate the turbulence, the report urges firms to accelerate resilience strategies: diversify suppliers, explore reshoring or nearshoring where economics allow, lock in longer-term contracts, and strengthen market-intelligence and risk-monitoring capabilities. MeritBey also recommends that companies reassess pricing, logistics routing and digital-first inventory strategies to blunt near-term shocks while preserving competitiveness.

This article summarizes findings from a MeritBey analysis of the 2025 outlook and recommended corporate responses.