Andy Haldane Says Boosting Trade Is Best Way To Improve UK Economy

Despite widespread predictions of its demise, globalization isn’t collapsing – it’s recalibrating. British Chambers of Commerce President Andy Haldane asserts that embracing international trade remains the most potent driver of UK economic growth, even amidst ongoing supply chain disruptions and geopolitical instability. This resilience necessitates a re-evaluation of risk mitigation strategies for businesses, particularly concerning international supply chains and trade finance, and presents opportunities for specialized trade finance solutions.

The Premature Obituary of Global Trade

The narrative surrounding globalization has shifted dramatically in recent years. Macroeconomic shocks – the COVID-19 pandemic, Russia’s invasion of Ukraine, and now escalating tensions in the Middle East – have fueled a wave of protectionist measures and a reassessment of supply chain dependencies. Donald Trump’s disruptive trade policies, including tariffs subsequently deemed illegal by the US Supreme Court (US Supreme Court Ruling), further accelerated this trend. The European Commission’s proposed ‘Buy EU’ directive (The Guardian) and similar initiatives in the UK, such as increased steel tariffs (City A.M.), signal a clear move towards regionalization and self-sufficiency.

The Achilles Heel, Not the Aorta: A Nuanced Perspective

Haldane’s assessment, though, offers a critical counterpoint. He frames the current disruptions not as a fatal blow to globalization, but as a painful rupture – an “achilles not the aorta.” This distinction is crucial. While the era of unfettered, frictionless trade may be over, the fundamental benefits of international commerce – access to larger markets, lower costs, and increased competition – remain substantial. The key, according to Haldane, lies in “playing our policy cards right.” This requires a proactive approach to mitigating risks, diversifying supply chains, and fostering international cooperation.

The Impact of Geopolitical Risk on Supply Chains

The recent escalation of conflict in Iran has amplified existing anxieties about geopolitical risk. Higher energy prices and increased interest rates are now looming threats, prompting calls for greater economic independence. The UK government faces mounting pressure to lift the ban on new North Sea oil drilling, a move that could potentially reduce reliance on volatile international energy markets. However, such decisions carry their own set of economic and environmental consequences. Businesses operating in affected regions are facing increased insurance premiums, logistical challenges, and potential disruptions to their supply chains. This environment demands robust risk management frameworks and access to specialized risk management consulting services.

“We’re seeing a fundamental shift in how companies view supply chain resilience. It’s no longer just about cost optimization; it’s about building in redundancy and diversifying sourcing to protect against unforeseen events.”

— Eleanor Vance, Head of Global Supply Chain Research, BlackRock.

Quantifying the Trade Slowdown: A Look at the Data

The slowdown in global trade is already evident in the data. According to the World Trade Organization (WTO), global merchandise trade volume grew by just 1.7% in 2025, a significant deceleration from the 3.4% growth recorded in 2024. Container freight rates, a key indicator of trade activity, have experienced increased volatility, with the Drewry World Container Index showing a 15% surge in the first quarter of 2026. The Baltic Dry Index, which measures the cost of shipping raw materials, remains elevated, reflecting ongoing supply chain bottlenecks. These trends are impacting corporate earnings, with companies reporting increased input costs and reduced profit margins. The average EBITDA margin for manufacturing firms in the UK fell to 12.5% in Q4 2025, down from 14.8% in the same period the previous year (source: Office for National Statistics).

The Role of Digitalization and Technology

Despite the challenges, digitalization and technological innovation offer potential solutions. Blockchain technology, for example, can enhance supply chain transparency and traceability, reducing the risk of disruptions, and fraud. Artificial intelligence (AI) can optimize logistics and inventory management, improving efficiency and reducing costs. Companies are increasingly investing in these technologies to build more resilient and agile supply chains. However, the implementation of these technologies requires specialized expertise and investment, creating opportunities for supply chain technology providers.

Navigating the New Trade Landscape: A Strategic Imperative

The current environment demands a strategic reassessment of trade policies and business practices. Governments need to prioritize international cooperation, reduce trade barriers, and invest in infrastructure to facilitate trade. Businesses need to diversify their supply chains, build stronger relationships with suppliers, and embrace digitalization to enhance resilience. The focus should shift from simply minimizing costs to maximizing value and mitigating risk.

The Implications for UK Businesses

For UK businesses, the implications are particularly acute. Brexit has already created new trade barriers with the EU, the UK’s largest trading partner. The ongoing geopolitical instability and the rise of protectionism further complicate the picture. The British Chambers of Commerce is urging the government to actively pursue new trade agreements and to provide support to businesses navigating the new trade landscape.

“The UK needs to be proactive in forging new trade relationships and ensuring that our businesses have the support they need to compete in a rapidly changing global environment. We can’t afford to be complacent.”

— Shevaun Haviland, Director General, British Chambers of Commerce.

The assertion that globalization is dead is, as Haldane suggests, premature. It is evolving, becoming more complex and fragmented. However, the fundamental principles of international trade remain valid. Businesses that can adapt to the new realities, embrace innovation, and prioritize resilience will be best positioned to thrive in the years ahead.

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