How is Trade Finance Adapting to Technology and Tariffs?

Global commerce is currently undergoing a fundamental shift, dictated by fluctuating tariffs, the rapid adoption of AI and a decisive move towards regionalised, multipolar supply networks.

According to the most recent Global Perspectives & Solutions (Citi GPS) report, Supply Chain Financing – Durable Global Trade in the Age of AI, the corporate sector has demonstrated significant fortitude. Despite systemic hurdles, firms are pivoting quickly to meet new policy demands while prioritising strategic diversification and the enhancement of working capital.

The findings leverage Citi’s proprietary Global Supply Chain Pressure Index, data from the US$5tn in daily payments handled by its Services division and insights from a broad spectrum of multinational firms and SMEs. Despite US tariffs jumping to nearly 16.8% from a pre-administration baseline of 2.4%, the Index suggests that supply chain volatility has settled near levels seen before the pandemic.

Executives have successfully buffered against tariff hikes through proactive inventory control, broader supplier networks and the acceleration of nearshoring strategies.

How operations can be transformed with technology

Adoniro Cestari, Global Head of Trade and Working Capital at Citi, says: “Technology is fundamentally reengineering how trade finance operates.

“AI-powered intelligent document processing enables exceptionally high accuracy rates and reducing processing to just minutes.

“Through a pilot of blockchain-based conditional trade payments, we have seen the potential for an evolution from standard paper-based guarantees to near 24/7 digital execution and automated settlement.”

Adoniro notes that the flow of goods now reflects a sophisticated restructuring of global corridors. ASEAN and South Asia have become primary hubs, seeing a 44% rise in shipments originating from North and East Asia.

Furthermore, Latin America is now more deeply embedded in both Asian and North American trade loops. Exports from the region to South Asia and ASEAN have climbed by 82%, marking the highest growth rate in the world. Simultaneously, the US has expanded its sourcing, with imports from South Asia and ASEAN increasing by 50% and Latin America by 43%, both outperforming the 32% growth seen from North and East Asia.

Shahmir Khaliq, Head of Services at Citi, explains the broader context: “Global trade and geopolitics are closely intertwined, with export growth from North and East Asia shifting towards more emerging economies in efforts to diversify customers.”

CapEx: How is it growing with AI infrastructure 

The research highlights how AI is triggering a potential once-in-a-generation capital expenditure supercycle within the data centre sector. Citi Research forecasts that global AI-related capex could reach US$7.75tn by 2030.

Trade finance is becoming an essential pillar of this development. Solutions such as structured receivables and supply chain finance are providing the necessary support for the capital-heavy requirements of AI infrastructure. AI integration within trade finance has surged, with 36% of major corporations now utilising these tools, an 18% rise from 2025.

“These types of innovations, combined with structuring expertise, helps companies unlock trapped liquidity and optimise working capital while supporting more efficient supply chains and the massive AI infrastructure buildout underway globally,” Adoniro adds.

The primary objective

For the C-suite, managing working capital has become a primary objective, with 64% of firms identifying rising input costs as a top-tier risk. Currently, an average of 6.3% of working capital is consumed by tariff-related expenses.

In response, treasury teams are utilising dynamic discounting, inventory finance and structured receivables to free up liquidity. A Citi survey of 710 major firms found that 65% are actively moving supply chains away from specific markets, with Vietnam, Thailand, India and Mexico being the top choices for relocation.

Significantly, 46% of those surveyed intend to streamline inventory levels to improve cash flow, a sharp increase from 16% in 2023. By late 2025, China's portion of US imports had dropped to 8%, down from its 2018 high of over 20%.

“Disruption is no longer a bug in global trade – it's a feature,” says Adoniro. “Having absorbed a pandemic, conflicts and now a highly fragmented policy environment, global trade is not in retreat – it is evolving, supported by innovation, investment and operational agility.”