The cost of doing business globally has reached a 10-year peak due to deglobalisation, friendshoring and the concurrent rise in global trade restrictions, according to a report by consultancy Verisk Maplecroft. 

The research, which was published on November 28 and uses a range of metrics on business environments, found that Germany, the UK, Canada, France and the US are among the major economies where business costs have risen the most. 

Global business costs have been steadily increasing over the past decade, according to Verisk Maplecroft, starting with the escalation of the US–China trade wars during Donald Trump’s first term as US president. The trade war’s cumulative impact on the global economy from 2018 to 2023 is estimated at between $1.5tn and $2tn.

“Despite some governments’ efforts to ease the burden, consumers and companies are going to foot the bill for a substantial realignment of the global production and flow of goods and resources between countries,” said Reema Bhattacharya, Verisk Maplecroft’s head of Asia research.

Business costs, which include taxes and labour, have increased across nearly all impacted countries, with the US, UK and South Korea experiencing the sharpest rises. Meanwhile, in Germany and France, there have been significantly higher borrowing costs for businesses due to adverse trade interventions.

Since 2018, 14 out of the 20 countries that have been most affected by protectionist trade policies have experienced notable deteriorations in their business environments, according to Verisk Maplecroft. This includes large economies representing about 45% of global gross domestic product.

Given president Trump’s re-election promise to impose a universal tariff on imports to the US of anywhere from 10% to 20%, Verisk Maplecroft says his trade protectionism could have “a boomerang effect”. This means that the ongoing derisking of global supply chains from geopolitical competitors, will likely continue to increase the cost of doing business in Western democracies.