5 Trends That Businesses Need to Watch in 2025

These are the forces that could shape the global economy over the coming year. 

Each year, companies carefully develop plans for increasing revenue, achieving new efficiencies and achieving other vital goals. 

No matter how much work goes into these blueprints, no matter how much businesses fine-tune their own operations, there’s always the possibility that some outside force will disrupt what was planned. 

Sometimes those are “unknown unknowns,” something that couldn’t have been predicted. Others, however, are known and should be factored into plans so companies can either avoid or mitigate any harm.

The following trends could influence how successful — or troubled — 2025 will be. 

Wars and geopolitical tension

Armed conflict in the Middle East escalated in 2024 and is likely to continue in 2025. The war between Ukraine and Russia is in its third year. There are other problems, such as the Sudanese civil war and unrest in Haiti. And that’s not getting into potential risks, like a blockade or invasion of Taiwan.

These conflicts inflict a tremendous human cost on the populations that are directly involved. They have a spillover impact on other nations, too. For example, global shipping costs soared in 2024 partly because of Houthi rebels in Yemen attacking ships in the Red Sea.

Since the pandemic, more companies have upgraded their supply chains to make them more resilient — and they can’t let down their guard in this area. Otherwise, they won’t be ready for another major disruption.  

Tariffs and trade wars

China has increased its production of a range of goods and materials, sending more low-cost exports to other nations and putting more pressure on industries there. Critics accuse the country of flooding the marketplace and are pushing back. 

In the United States, the Biden administration has pursued a series of trade restrictions against China, including rule updates that will increase costs for ecommerce companies like Temu and Shein. Solar products, electric cars, steel, aluminum — they all face increased restrictions.

The US has also stopped the export of advanced semiconductor and chip-making technology to some countries. And it’s likely the US will continue to use tariffs and support industrial policy. Both presidential candidates said they would. 

There’s also a risk of increased trade conflicts between China and the European Union. EU countries voted to impose duties on Chinese electric vehicles, and China responded with trade measures against European brandies. It’s possible other products will be affected, too. 

At the same time, trade wars could create opportunities, too. India could benefit by stepping into markets where China has been limited. 

Interest rates

The coming year could see more central banks moving to reduce their benchmark rates. Several countries have already done so, and more cuts are likely. 

The US Federal Reserve has started reducing the benchmark interest rate, but there’s more room to cut. The median prediction is the interest rate will be 3.4% at the end of 2025, according to a September survey of Federal Open Market Committee participants. 

A Reuters survey of economists predicts the European Central Bank will cut the benchmark to 3% by the end of the year, with four more cuts in 2025. 

The Reserve Bank of India didn’t change rates during its October meeting, but cuts could happen as soon as December.

Artificial intelligence

AI use has increased, but there are still a lot of questions about its ultimate potential. At the edges, some experts aren’t sure if the technology will lead to utopia or civilizational collapse. In the short term, it could spur productivity gains in the workplace, though those may be marginal at first. 

Other short-term effects include higher demand for energy (because AI consumes more power) and increased disinformation and scams powered by AI. 

Governments are starting to prepare for the downsides of AI. This year, the European Union signed landmark legislation to ensure privacy and transparency. Companies in other countries could adopt those rules, too, as they did with the General Data Protection Regulation (GDPR).  

Natural disasters and climate change

Catastrophic flooding in Pakistan and Afghanistan. Typhoon Yagi in southeast Asia. A series of hurricanes in the southeastern United States. A severe drought in southern Africa that led to crop shortages and 68 million in need of aid. Those disasters and others like them caused intense human suffering and massive amounts of property damage in 2024. 

Even when the weather isn’t an immediate life-or-death threat, it can still have an impact, like the drought that choked traffic through the Panama Canal. 

All that can affect the business environment, whether it’s in the form of higher insurance costs, supply chain shortages or the ability to operate normally. Smart businesses will develop contingency plans to prepare for any crises. 

The bottom line

These trends may feel unmanageable because, in many cases, they’re as big as the world. To adapt, forward-thinking businesses should control what they can control, like developing backups and ensuring they have enough liquidity to weather any setbacks. C2FO’s Early Pay can help. Our solution gives companies the power to accelerate their invoices and build their cash reserves. Learn more about how it works here.