Citi Supply Chain Financing Report: Durable Global Trade in the Age of AI

The report provides industry insights from Citi's proprietary Global Supply Chain Pressure Index, payment flows of the over $5 trillion its Services business processes daily, alongside survey responses from multinational corporations and small- and medium-sized enterprises (SMEs). While U.S. tariffs rose to approximately 16.8% from 2.4% before the change in US Administration, the Index shows supply chain pressures remained subdued and near pre-pandemic levels. Companies successfully navigated initial tariff shocks through strategic inventory management, supplier diversification, and accelerated nearshoring initiatives.

Analysis of goods reveals a complex reorganization of global trade. South Asia & ASEAN emerged as major winners, with a 44% increase in shipments from North & East Asia. Latin America has become deeply integrated into both Asia- and North America-linked supply chains, with exports to South Asia & ASEAN surging 82%, the single largest increase globally. The U.S. diversified its import base, with shipments from South Asia & ASEAN up 50% and from Latin America up 43%, both exceeding the 32% growth from North & East Asia.

The report examines how AI is creating a once-in-a-generation capital expenditure supercycle in data centers, with Citi Research estimating $7.75 trillion in global AI-related capex by 2030. Trade finance is playing an increasingly critical role in this ecosystem, with solutions ranging from supply chain finance to structured receivables programs supporting the complex, capital-intensive nature of AI data center development. AI adoption in trade finance accelerated dramatically, with 36% of large corporates now using AI tools, an 18% increase from the previous year.

"These types of innovations, combined with structuring expertise, helps companies unlock trapped liquidity and optimize working capital while supporting more efficient supply chains and the massive AI infrastructure buildout underway globally." Adoniro Cestari went on to say.

Working capital management has become a C-suite imperative, with 64% of companies citing increasing input costs as their primary concern. On average, 6.3% of working capital is now tied up in funding tariff costs. In response, companies are deploying inventory finance, structured receivables programs, and dynamic discounting to release trapped liquidity. Citi's survey of 710 large corporations revealed that 65% are actively diversifying supply chains away from one or more countries, with Vietnam, Thailand, India, and Mexico emerging as preferred destinations.