Global trade has fallen into a trough of sustained volatility, driven by tariff and regulatory regimes, geopolitical unrest and haphazard enforcement.
The U.S. Supreme Court’s recent ruling against the Trump administration’s tariffs is sure to add more volatility and uncertainty to the mix, but a vendor survey conducted last month suggests dealmakers here and abroad were already feeling uneasy about global trade even before the high court handed down its decision.
A large majority (83%) of business leaders surveyed by Avalara, a provider of cloud-based tax compliance software, agreed that cross-border operations are more complex than they were a year ago. Seven in 10 respondents said cross-border trade is more complex than three years ago.
The 1,500 poll participants were senior decision-makers with businesses across the United States, United Kingdom, India and Australia that trade or sell goods cross-border.
“For many companies, the challenge is not simply the volume of regulation but the unpredictability of change,” Avalara wrote in its survey report. “Rules can shift after market entry, enforcement can vary dramatically between jurisdictions, and border disruptions can derail even well-planned operations.”
About half (49%) of the leaders cited regulatory change after market entry as a top risk of cross-border expansion. Many (43%) said their companies are actively expanding into new markets, but almost as many (39%) said they have delayed market entry due to regulatory uncertainty, while 14% said they have abandoned altogether a plan to enter a market.
More than half (52%) of those surveyed said tariffs and duties are creating the greatest operational burden, followed closely by customs processes and regulatory interpretation, according to the report. In fact, such issues now shape market-entry decisions as much as customer demand or competitive positioning, according to Avalara.
Amid the eroding confidence, companies are predictably turning to technology to restore control. Naturally, artificial intelligence has entered the cross-border compliance arena, with most companies using it in some capacity while about a quarter are using it broadly across markets or functions.
“Trust is no longer anchored primarily in policy frameworks, but in systems that can adapt quickly as rules change,” Avalara wrote.
Meanwhile, two-thirds of leaders from U.K. businesses said Europe has emerged as the most challenging trade market. For many British firms, the continent now represents a test case for whether cross-border growth is worth the operational and compliance burden, according to the report.
In reaction, some companies are investing more in compliance infrastructure, reassessing supply chains or shifting growth efforts to markets perceived as more predictable, Avalara said.
