Global trade finance gap stands at $2.5 trillion amid rising trade tensions

The global trade finance gap stood at $2.5 trillion in 2025, continuing to weigh on economic growth as companies face rising trade tensions and restructuring supply chains, according to a new report from the Asian Development Bank (ADB).

Although the gap is unchanged from the previous survey in 2023, ADB noted that it has widened significantly over the past decade, rising from $1.5 trillion in 2015. The persistent shortfall represents a missed opportunity to support global trade, investment, and development, particularly for small and medium-sized enterprises.

Steven Beck, ADB’s head of trade and supply chain finance, said that recent tariffs imposed by the United States and broader geopolitical uncertainty are driving higher demand for trade finance as companies diversify suppliers and reconfigure global supply chains.

“Without sufficient financing to support this transition, the adjustment to a new global trade environment will be more difficult than necessary,” Beck said.

ADB added that part of the gap may reflect cyclical factors, including lower commodity and energy prices since 2023, which have reduced working capital needs for some businesses. The report also highlighted the growing role of fintech platforms, which may be helping to ease financing constraints, though their overall impact requires further study.

In addition, the bank observed a gradual shift toward the use of local and alternative currencies, including China’s yuan. While the U.S. dollar still dominates trade finance transactions, more than half of surveyed banks reported increasing demand for local currency financing, driven by changing trade routes and limited access to dollar liquidity.

ADB said expanding local currency financing options could help narrow the global trade finance gap over time.