It is tempting to hope that after a period of intense geopolitical and trade turbulence, the dust is finally settling. But this would be a dangerous assumption to make. While the pace of headline tariff announcements may have slowed, the financial risks and opportunities created by the changing global trade landscape are just beginning to emerge. Waiting for stability is not a viable strategy.
New US trade restrictions have already made many existing markets and supply chains financially unviable. More importantly, the second and third-order financial impacts—from supply chain disruptions to hidden costs—are yet to be fully priced in. This is not a minor adjustment; it is a fundamental shift that can destroy value or, if identified early, create a significant competitive advantage.
Key dynamics in the trade landscape
We see four key dynamics in the emerging trade landscape:
- While the pace of headline US tariff announcements and deals will slow, the US will continue to introduce new restrictions and condition tariff relief on yet-to-be-determined origin rules and supply chain security conditions.
For example, we know that the US is still pushing to exclude Chinese inputs from the products benefiting from its deals with countries in Southeast Asia, and finalising a new quota for UK steel exports has been held up by US concerns about provenance and Chinese involvement. We expect this process to continue into Q1/Q2 2026, and remain under constant review.
- US trade policy is not just about tariffs; it is a fundamental recasting of America’s political and economic relationships across the globe. This is a rolling agenda, with tariff initiatives the most readily deployable hard power lever – as manifested through pressure on EU competition policy treatment of US tech firms, and on free speech. Foreign governments can be pressured to apply new export controls that restrict market access, fundamentally undermining business models, especially in the tech sector.
- The second-order impacts are yet to be felt, particularly as companies and governments are still deciding how best to address customer markets and supply chains that are no longer viable due to new tariff regimes and other non-tariff barriers. It will take years for these decisions to be made and for value chains to be reorganised.
- The speed and intensity of US trade announcements have given the impression that changes are largely confined to US initiatives and country responses. But the US’s dramatic break with the pre-2025 trade order has created a more permissible environment for other countries to pursue a more politically driven trade policy.
Other governments will increasingly use trade policy to achieve geopolitical, economic and ESG ends. China’s weaponisation of export controls on certain critical mineral components, including batteries, has roiled many advanced manufacturing supply chains.
What traditional due diligence and trade assessments typically miss
Traditional due diligence is no longer enough. Standard financial and legal reviews cannot fully capture the complex, evolving risks associated with a firm’s international trade practices. These risks can have a direct, material impact on a company's financials, affecting everything from its revenue to its profit margins.
Consider these common, value-eroding issues we consistently find in our assessments:
- Undisclosed costs: Is the firm relying on a supply chain that is about to be hit with a new tariff? Even where businesses can determine which tariff applies to their product, we are increasingly seeing products challenged at the border due to a vague and tightening origin regime, the quantity of US content, and specific metal content. These hidden costs are often not reflected in the financials and can lead to a significant erosion of your Quality of Earnings assessment.
- Revenue at risk: A company might be selling into a market that is about to become non-viable due to new tariffs or non-tariff barriers, like new carbon payment requirements, making it uncompetitive. Crucial inputs may also be vulnerable to export restrictions. This puts future revenue streams at risk and can significantly impact the deal's valuation.
- Operational instability: Supply chains can be fragile. A trade due diligence assessment can uncover a single-source supplier in a high-risk jurisdiction, or a reliance on a material subject to geopolitical weaponisation (e.g., critical minerals or advanced semiconductors). This reveals a significant operational vulnerability that could lead to production delays, stock-outs, and a loss of market share post-acquisition.
How our trade assessments value and mitigate risk
Our International Trade Assessment is a proprietary framework designed to provide the exclusive insight needed for informed decision-making in a volatile international trade environment. We provide a comprehensive analysis that complements existing commercial, legal and financial due diligence. This service is designed to help you:
- Identify and quantify trade risks: We analyse a target company’s current trade practices to identify potential risks, such as non-compliance with international trade rules or exposure to potential trade actions. This analysis is benchmarked against a range of trade and geopolitical risk factors, allowing us to provide a straightforward ranking system.
- Uncover operational improvement opportunities: Our assessment goes beyond risk identification to uncover underutilised trade preferences and other operational improvement opportunities. These insights can be leveraged post-acquisition to increase profitability, enhance operational efficiency, and drive a greater return on your investment.
Provide actionable insights: We provide a clear summary of potential mitigating actions and a list of suggested next steps to address identified risks and capitalise on opportunities. These insights are designed to be actionable, allowing your team to immediately begin planning for post-acquisition value creation.
We can provide clients with a variety of products based on our International Trade Assessment:
What we offer
- Trade Due Diligence, to sit alongside or commercial or operational due diligence on a firm being considered for investment. This can be stand alone or be integrated into Flint’s market-leading political and regulatory due diligence product.
- Country-specific or sector-specific analysis to support origination and the development of investment theses, highlighting where trade policy (and geopolitical factors) currently or might create commercial or operational risk (e.g. due to tariff, non-tariff restrictions or customs delays) or opportunities.
- Regular trade policy updates, tailored to how trade and geopolitical developments could impact a firm’s entire value chain or some parts of it (e.g. EU-China supply chains)
Get in touch
In today’s complex global environment, thorough trade due diligence is not a luxury; it is a necessity for protecting your investment and uncovering hidden value.
Our distinct approach is not just a review of trade-specific policies and documents; it’s a holistic assessment that examines a firm’s entire business operation to identify areas of potential cross-border regulatory risk and underutilised opportunities, from reviewing supplier contracts to process flows. We also endeavour to anticipate geopolitical and trade interventions in order to account for the specific commercial impact.
This blog was written by Partners Sam Lowe and Katie Whitting, and our Senior Adviser on international trade, George Riddell. Sam heads our trade and market access practice, while Katie advises investors and corporates on economic security, investment and geopolitics.
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