Navigating Turbulent Waters ICIEC’s Strategic Role Amid Trump-Era Policy Shifts in Global Trade and Investment Insurance

With some USD4 to USD64 trillion dollars wiped off US, European and global stocks in the two days after President Donald Trump’s declaration of “economic independence” and the imposition of a range of tariffs starting with a baseline 25% on steel and aluminium imports to the US, 10% tariffs for certain countries and a range of tariffs for other countries, the second-term Trump administration has disrupted the existing world trade, investment and business order. There are no signs of a retreat from this unilateral and isolationist US playbook which will impact every corner of the world including the US. Rao Farid Khan, Lead Legal Counsel and Head of Claims and Recoveries at ICIEC, considers the potential fallout for the credit and investment insurance industry and how the Corporation is positioning itself as a unique stabiliser and enabler of global and intra-OIC trade and investment.

President Donald Trump’s recent return to office and the policy shifts of his current administration have once again marked a critical juncture in the global economic landscape. Building on the disruptive strategies of his previous term, the renewed focus on protectionist trade policies, strategic decoupling, and a retreat from multilateral cooperation have intensified global economic uncertainty.

Actions such as renegotiating international trade agreements, reasserting national sovereignty over global institutions, and limiting U.S. engagement in global initiatives continue to challenge the foundations of international economic governance. These developments hold significant implications for global trade, investment flows, and credit insurance, potentially affecting the role and operations of multilateral institutions like ICIEC.

As a specialized multilateral insurer dedicated to promoting investment and trade among its 50 member states from the Global South, ICIEC now stands at a critical juncture. The current geopolitical and economic climate presents both elevated risks and profound strategic opportunities. The reinstatement of trade protectionism under Trump 2.0, marked by tariffs on imports from China, Europe, and various developing economies, has disrupted global supply chains and increased transaction costs. These changes have retendered cross-border commerce more unpredictable and significantly heightened the risk of defaults in international transactions. For the credit insurance industry, including ICIEC, this has led to a surge in demand for trade credit insurance, particularly from exporters in emerging markets who are increasingly seeking protection against non-payment risks and contractual disruptions.

In response to the current market challenges, ICIEC is uniquely positioned to play a crucial role in stabilizing and enabling trade. By enhancing its short-term credit insurance offerings and expanding its technical assistance services, ICIEC can develop robust credit insurance products tailored for high-risk markets, including the United States. This will provide vital support to exporters from its member states, helping them to remain resilient in the face of market volatility. Through these efforts, ICIEC not only fulfils its developmental mandate but also establishes itself as a dependable partner in an increasingly unpredictable trade environment.

Moreover, the U.S. retreat from key multilateral frameworks, such as the Paris Climate Accord and the World Health Organization (WHO), under President Trump has weakened the foundations of international cooperation. The diminished role of the United States in global governance has created institutional voids, particularly in areas such as public health and climate change. For multilateral insurers, this fragmentation imposes coordination challenges, undermining collective responses to systemic risks. However, this also presents a unique opportunity for ICIEC to assert leadership within its member states by deepening regional integration and fostering South-South cooperation.

ICIEC’s mission, grounded in Islamic principles of financial and insurance intermediation, allows it to offer a compelling alternative to the nationalist and isolationist rhetoric that has gained prominence. By promoting inclusive trade and investment models that prioritize sustainable development, ICIEC can emerge as a beacon of multilateralism and collaborative resilience amongst its member states. ICIEC’s ability to foster intra-OIC economic ties through innovative insurance mechanisms will be pivotal in offsetting the impact of global fragmentation.

Simultaneously, the Trump administration’s aggressive posture toward geopolitical hotspots such as Iran and China, has contributed to heightened regional instability and a more precarious global investment climate. These developments increase demand for Political Risk Insurance (PRI), which offers protection against risks such as expropriation, political violence, currency inconvertibility, and contract frustration. ICIEC can respond to this rising demand by broadening its PRI offerings and enhancing its insurance products tailored to infrastructure, energy, and social development projects in member states. By engaging in co-insurance and reinsurance partnerships with other Export Credit Agencies (ECAs) and private reinsurers, ICIEC effectively manages largescale exposures while supporting transformational projects that align with national development priorities.

The third pillar of the IsDB Group Strategic Realignment 2023-2025 focuses on driving green economic growth. By supporting climateresilient infrastructure projects and offering insurance solutions for green Sukuk and ESG-compliant investments, ICIEC facilitates sustainable development while managing emerging climate-related risks. This aligns with the strategic objective of driving green economic growth, as it promotes investments in sustainable and environmentally friendly projects, thereby contributing to the overall goal of green economic development. ICIEC’s Sukuk Insurance Policy, alongside its Non-Honouring of Sovereign/Sub-sovereign Policy, offers a framework through which it can mobilize capital for environmentally responsible projects and attract private sector participation in sustainable investment.

Perhaps the most defining feature of Trump-era economic policy is its unpredictability – a trait that intensifies demand for comprehensive risk mitigation instruments. In such a volatile global environment, credit and political risk insurance are not mere tools of financial prudence; they are essential components of resilience and continuity for governments, corporations, and SMEs alike. ICIEC can respond to this need by offering bundled insurance solutions that address both commercial and political risks, particularly in high-volatility markets. ICIEC’s ability to support small and medium enterprises (SMEs), which often lack the capacity to absorb shocks, will be critical in maintaining inclusive trade and investment flows.

Further, ICIEC can expand its capacity-building initiatives to enhance the risk mitigation capabilities of stakeholders in member states, thereby contributing to greater institutional and economic resilience.

The reality of Trump’s presidency and its current policies introduces new layers of complexity into the global trade and investment landscape, with potential trade wars, a NATO rethink, and the deportation of millions of migrants. Nevertheless, within this turbulence lies an opportunity for ICIEC to redefine its role and expand its influence. By embracing innovation, reinforcing strategic partnerships, and aligning its offerings with the values and aspirations of its member states, ICIEC can rise as a leader in the global credit and investment insurance domain. Its ability to navigate uncertainty while remaining committed to sustainable, inclusive, and ethical development will determine its trajectory in the years to come.

As the world continues to fragment and global leadership remains in flux, institutions like ICIEC are not only tasked with protecting trade and investment flows but also with enabling them in ways that are just, resilient, and aligned with long-term development goals. By scaling up support for SMEs through agile credit insurance, diversifying political risk coverage, deepening regional collaboration, and pioneering climate-aligned insurance instruments, ICIEC can help build a more equitable and sustainable global economy. The path forward demands strategic foresight, bold innovation, and a steadfast commitment to the developmental aspirations of the IsDB Group member countries. In this mission, ICIEC is not merely an insurer—it is also a catalyst for stability, growth, and shared prosperity.