Tariff uncertainty weighing on business confidence, despite resilient global trade

Speaking to the BBC’s The Context, ICC Secretary General John W.H. Denton AO said the central challenge facing businesses is not tariffs in themselves, but the lack of predictability surrounding their legal basis and future application.

“There’s a lot of debate about which legal authorities are being used … and even whether some of these measures will ultimately stand up in court,” he said. “From a business perspective, the real problem is uncertainty. Companies simply don’t know what is going to happen next.”

Mr Denton noted that while the US administration has signalled its intention to continue relying on tariffs as a core economic policy tool, key legal questions remain unresolved, including the potential for further legal challenges and the issue of refunds on duties already paid.

Despite the turbulence around US trade policy, Mr Denton highlighted that the global trading system continues to function. The US accounts for roughly 13% of global trade, he said, and most international commerce is still conducted under the rules of the World Trade Organization.

“Global market forces are still compelling companies to trade across borders,” he said. “Major exporting countries like Germany, Japan and China remain major exporters, and in many cases are lowering costs to enable more trade. The rest of global trade is, in that sense, relatively healthy.”

However, Mr Denton cautioned that aggregate figures can mask real pressures on smaller businesses. For countries such as Germany, where the US remains the largest export market, uncertainty over access conditions is creating confusion and contributing to slowdowns in decision-making.

“In the end, it’s small- and mid-sized companies trying to work out what to do next,” he said. “That confusion is what causes delays, investment hesitation and real economic pain.”

Asked whether the US had overplayed its hand with repeated tariff threats, Mr Denton said the administration was clearly committed to a tariff-based strategy but that it remains unclear whether the policy would deliver its stated objectives.

“There’s a big bet being made here,” he said. “The question now is whether this leads to higher inflation in the US and whether the expected revenue actually materialises. At this stage, that’s far from certain.”

ICC has called on governments to prioritise clarity and legal certainty in trade policymaking, warning that prolonged unpredictability risks undermining growth, job creation and confidence across the global economy.

Reacting to the Supreme Court ruling in an earlier interview with CNBC, Andrew Wilson, ICC Deputy Secretary General, said the decision failed to provide businesses with either a clear pathway to tariff refunds or any indication that the US administration would soften its tariff-first trade policy. Mr Wilson warned that continued uncertainty could prove “crippling” for investment and could ultimately result in a more complex and damaging tariff regime for international commerce.